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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
NORWEST CORPORATION
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[X] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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LOGO
March 21, 1995
Dear Stockholder:
The annual meeting of stockholders will be held on Tuesday, April 25, 1995,
at 10:00 a.m., Minneapolis time, in the Lutheran Brotherhood Auditorium, 625
Fourth Avenue South, Minneapolis, Minnesota. The formal Notice of the Meeting
and Proxy Statement appear in the pages that follow.
In addition to the election of directors and the ratification of the
appointment of auditors for the year 1995, stockholders will be asked to
consider and vote upon a proposal to amend Norwest Corporation's Restated
Certificate of Incorporation to authorize 4,000,000 shares of Preference Stock.
We recommend that you vote for the proposals referred to above, which are set
forth in more detail in the accompanying proxy statement.
Sincerely,
[SIGNATURE OF RICHARD M. KOVACEVICH]
RICHARD M. KOVACEVICH
President and
Chief Executive Officer
------------------
Please sign and date the enclosed proxy and return it promptly in the enclosed
envelope if you do not expect to be personally present and wish your stock to
be voted. If you later find that you may be present or for any other reason
desire to revoke your proxy, you may do so at any time before it is voted.
------------------
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NORWEST CORPORATION
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 25, 1995
---------------------
To the Holders of Common Stock of
Norwest Corporation:
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of Norwest
Corporation, a Delaware corporation (the "Corporation"), will be held in the
Lutheran Brotherhood Auditorium, 625 Fourth Avenue South, Minneapolis,
Minnesota, on Tuesday, April 25, 1995, at 10:00 a.m., Minneapolis time, for the
following purposes:
(1) To elect directors to hold office until the next annual election and
until their successors shall be duly elected and qualified;
(2) To consider and vote upon a proposal to amend the Corporation's
Restated Certificate of Incorporation to authorize a new class of
capital stock consisting of 4,000,000 shares of Preference Stock;
(3) To consider and vote upon a proposal to ratify the appointment by the
Board of Directors of KPMG Peat Marwick LLP to audit the books of the
Corporation and subsidiaries for the year ending December 31, 1995; and
(4) To transact such other business as may properly come before the
meeting.
Only holders of common stock of record at the close of business on March 7,
1995, will be entitled to vote at the meeting or any adjournment thereof.
By Order of the Board of Directors,
[SIGNATURE OF LAUREL A. HOLSCHUH]
LAUREL A. HOLSCHUH
Secretary
March 21, 1995
<PAGE>
NORWEST CORPORATION
NORWEST CENTER
SIXTH AND MARQUETTE
MINNEAPOLIS, MINNESOTA 55479
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PROXY STATEMENT
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This proxy statement is furnished in connection with the solicitation by the
Board of Directors of Norwest Corporation (the "Corporation") of proxies for
the annual meeting of stockholders to be held Tuesday, April 25, 1995. Shares
of common stock may be represented at the annual meeting by stockholders in
person or by proxy. Where specification is made in the proxy, the stock will be
voted in accordance therewith. Where no specification is made in the proxy, the
stock will be voted in favor of the election of the director-nominees named
herein and the other proposals being submitted to stockholders at the meeting,
unless authority to vote has been properly withheld on the proxy, as discussed
more fully under the heading "VOTING PROCEDURES" below. Proxies may be revoked
at any time before being voted.
This proxy statement and the enclosed form of proxy are being mailed to
stockholders commencing on or about March 21, 1995.
Expenses in connection with this solicitation of proxies will be paid by the
Corporation. Solicitation of proxies will be principally by mail. In addition,
one or more officers or employees of the Corporation or its subsidiaries may
solicit proxies, either personally, by telephone, or by special letter, from
some stockholders. The Corporation will also make arrangements with brokerage
houses and other custodians, nominees and fiduciaries to send proxy materials
to their principals, and will reimburse them for their expenses in so doing.
The Corporation has retained Georgeson & Company Inc., New York, New York, to
assist in the solicitation of proxies on its behalf for a fee of $10,000 plus
out-of-pocket expenses.
So far as the Board of Directors and the management of the Corporation are
aware, no matters other than those described in this proxy statement will be
acted upon at the meeting. If, however, any other matters properly come before
the meeting, it is the intention of the persons named in the enclosed proxy to
vote the same in accordance with their judgment on such other matters.
SHARES OUTSTANDING
There were outstanding on March 7, 1995, the record date for stockholders
entitled to vote at the meeting, 311,274,079 shares of common stock, each share
being entitled to one vote.
The following table contains information with respect to each person,
including any group, known to the Corporation to be the beneficial owner of
more than 5% of the common stock of the Corporation as of December 31, 1994.
Beneficial ownership of common stock has been determined for this purpose in
accordance with Rule 13d-3 of the Securities and Exchange Commission, under
which a person is deemed to
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be the beneficial owner of securities if he or she has or shares voting power
or investment power in respect of such securities or has the right to acquire
beneficial ownership within 60 days.
<TABLE>
<CAPTION>
AT DECEMBER 31, 1994
---------------------------------
AMOUNT AND NATURE OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP COMMON STOCK
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<S> <C> <C>
Certain subsidiary banks, including Norwest
Bank Minnesota, N.A., and trust company
subsidiaries of Norwest Corporation,
Norwest Center, Sixth and Marquette,
Minneapolis, Minnesota 55479 28,905,151(1) 9.3%
Certain subsidiaries, including investment
advisors and an insurance company, of The
Equitable Companies Incorporated, 787
Seventh Avenue, New York, New York 10019 21,520,180(2) 6.9%
</TABLE>
- ---------------------
(1) With respect to 10,377,079 of these shares, which include 2,000 shares
issuable upon conversion of the Corporation's convertible subordinated
debentures and 7,946 shares issuable upon conversion of the Corporation's
Cumulative Convertible Preferred Stock, Series B, such subsidiaries had, in
the aggregate: sole voting power over 8,117,263 shares, shared voting power
over 1,105,233 shares, and no voting power over the remaining 1,154,583
shares; sole dispositive power over 7,464,546 shares, shared dispositive
power over 2,327,109 shares, and no dispositive power over the remaining
585,424 shares.
The amount shown also includes 18,528,072 shares held in the Master Savings
Trust for participants in the Corporation's Savings-Investment Plan.
Participants have the power to direct the voting of the shares held in
trust based on the ratio of the value of each participant's accounts in the
Norwest stock funds to the total value of the funds on a valuation date not
more than 90 days preceding the record date for the applicable
stockholders' meeting. Shares held in trust on the applicable record date
will be voted ratably by Norwest Bank Minnesota, N.A., as trustee of the
trust, based on the instructions of all plan participants who give
instructions.
The foregoing shares are held in a fiduciary or representative capacity,
and the Corporation and such subsidiaries disclaim beneficial interest in
these shares.
(2) With respect to these shares, certain subsidiaries, including investment
advisors and an insurance company, of The Equitable Companies Incorporated
had, in the aggregate: sole voting power over 12,795,862 shares, shared
voting power over 535,800 shares, and no voting power over the remaining
8,188,518 shares; and sole dispositive power over 21,520,180 shares.
VOTING PROCEDURES
ELECTION OF DIRECTORS
Under Delaware law, directors are elected by a plurality of the votes cast by
the shares present in person or represented by proxy at the meeting.
Consequently, only shares that are voted in favor of a particular nominee will
be counted toward such nominee's achievement of a plurality. Shares present at
the meeting that are not voted for a particular nominee or shares present by
proxy where the stockholder properly withheld authority to vote for such
nominee (including broker non-votes) will not be counted toward such nominee's
achievement of a plurality.
AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION
The vote of a majority of all outstanding shares of common stock in favor of
the proposed amendment to the Corporation's Restated Certificate of
Incorporation (the "Restated Certificate") to authorize a new class of capital
stock consisting of 4,000,000 shares of Preference Stock (Proposal 2) is
required under Delaware law for such proposal to be approved. Shares abstaining
from voting on a particular matter are considered present at the meeting for
purposes of determining a quorum, but are treated as having voted against the
matter at the meeting. Shares for which a broker has either not received voting
instructions from
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the beneficial owner thereof on matters on which the broker is not permitted to
vote such shares in its discretion under applicable exchange rules, or for
which such discretionary authority has been withheld ("a broker non-vote") are
considered present at the meeting but are not counted for voting purposes with
respect to such matter. Under New York Stock Exchange rules, member brokers may
not vote shares held of record by such brokers on the proposal to authorize
Preference Stock in the absence of voting instructions on such proposal from
the beneficial owners of such shares. Consequently, both abstentions and broker
non-votes with respect to Proposal 2 would have the same effect as votes
against such proposal.
POLICY ON CONFIDENTIAL VOTING
It is the policy of the Corporation that all stockholder meeting proxies,
ballots, and voting tabulations that identify the particular vote of a
stockholder are to be kept confidential and that the particular vote of any
stockholder shall not be disclosed to any third party prior to the tabulation
of the final vote at the annual stockholders' meeting except (i) as necessary
to meet applicable legal requirements; (ii) to assert claims for or defend
claims against the Corporation; (iii) to allow the inspectors of election to
certify the results of the stockholder vote; (iv) in the event of a proxy
solicitation in opposition to the Corporation or the Board of Directors; or (v)
to respond to stockholders who have written comments on proxy cards or where a
stockholder expressly requests disclosure. As provided in such policy,
inspectors of election and tabulators of stockholder votes may not be employees
of the Corporation, but may be employees of an affiliated bank, provided that
such inspectors and tabulators shall be instructed to comply with this policy.
ITEM 1. ELECTION OF DIRECTORS
As of the date hereof, the Board of Directors consists of 17 persons.
Directors N. Berne Hart, George C. Howe, and John E. Pearson will be retiring
as directors of the Corporation at the 1995 annual meeting. The Board of
Directors has therefore fixed the number of persons to be elected as directors
at the annual meeting at 14 and designated the individuals named below as
nominees for election. All of the nominees have indicated a willingness to
serve, but in case any nominee is not a candidate at the annual meeting, it is
the intention of the persons named in the enclosed proxy to vote for the
remainder of the designated nominees and to vote for a substitute nominee in
their discretion. All nominees are presently directors of the Corporation and
have been previously elected by the stockholders. Directors are elected to hold
office until the next annual election and until their successors are duly
elected and qualified.
Additional information regarding these nominees is set forth below and on
pages 12, 13, 28, 29, and 30, and the number of shares of common stock of the
Corporation beneficially owned by each of them as of February 28, 1995, is set
forth on pages 13 through 15. Except as may be otherwise expressly stated, all
nominees for director have served in the capacities indicated for more than
five years.
DAVID A. CHRISTENSEN, 59 Director since 1977
President and Chief Executive Officer and Director
(PICTURE) Raven Industries, Inc.
(Diversified Manufacturer of Plastics, Electronics, and
Special-Fabric Products)
Sioux Falls, South Dakota
Mr. Christensen also serves as a director of Northern States
Power Company and Norwest Bank South Dakota, N.A., a
subsidiary of the Corporation.
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GERALD J. FORD, 50 Director since 1994
Chairman of the Board, Chief Executive Officer and Director
(PICTURE) First Nationwide Bank, a Federal Savings Bank
(Financial Services)
Dallas, Texas
Over the last five years, Mr. Ford served as Chairman of the
Board and Chief Executive Officer and a director of First
Madison Bank, FSB of Dallas, Texas ("First Madison")
(formerly known as First Gibraltar Bank, FSB). In 1994, in
connection with its acquisition of First Nationwide Bank,
FSB, First Madison changed its name to "First Nationwide
Bank, a Federal Savings Bank." Mr. Ford also served as
Chairman and Chief Executive Officer of First United Bank
Group, Inc., until it was acquired by the Corporation on
January 14, 1994.
Mr. Ford also serves as President and owner of Diamond A--
Ford Corporation; as a director of Affiliated Computer
Systems, Inc., Millennium Mortgage Company, and Madison
Realty Advisors, Inc.; as a trustee of Southern Methodist
University (SMU) and Children's Medical Foundation; as a
member of the Board of Regents of Texas A&M University; as a
member of the Dallas Citizen's Counsel; as Vice Chairman of
the Executive Board of Dedman College, SMU; and as a director
of the Dallas Boys and Girls Clubs, Inc. and the School of
American Research, Santa Fe, New Mexico.
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PIERSON M. GRIEVE, 67 Director since 1987
Chairman and Director
(PICTURE) Ecolab Inc.
(Developer and Marketer of Cleaning, Sanitizing,
and Maintenance Products and Services)
St. Paul, Minnesota
Over the last five years, Mr. Grieve served as Chairman,
President and Chief Executive Officer of Ecolab Inc. until
August 21, 1992, when he became Chairman and Chief Executive
Officer. On March 1, 1995, he assumed his present position.
Mr. Grieve also serves as a director of Meredith Corporation,
U S WEST, Inc., and The St. Paul Companies, Inc.; as Chairman
of the Board of Overseers of the Carlson School of Management
at the University of Minnesota; as Chairman of the Advisory
Board of Minnegasco; as a member of the Advisory Council of
the Kellogg Graduate School of Management of Northwestern
University; and as a member of the Executive Committee of the
Minnesota Business Partnership, Inc. and The Guthrie Theater.
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CHARLES M. HARPER, 67 Director since 1985
Chairman and Chief Executive Officer and Director
RJR Nabisco Holdings Corp.
(PICTURE) (Consumer Packaged Goods)
New York, New York
Over the last five years, Mr. Harper served as Chairman of
the Board and Chief Executive Officer of ConAgra, Inc. until
September 16, 1992, when he was elected as Chairman of the
Board. Effective May 31, 1993, Mr. Harper assumed his present
position. Effective January 19, 1995, Mr. Harper became
Chairman of the Board of Nabisco Holdings Corp.
Mr. Harper also serves as a director of Peter Kiewit Sons',
Inc., Valmont Industries, Inc., E. I. DuPont deNemours &
Company, and ConAgra, Inc.
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WILLIAM A. HODDER, 63 Director since 1971
Chairman and Chief Executive Officer and Director
(PICTURE) Donaldson Company, Inc.
(Manufacturer of Filtration and Emission
Control Products)
Minneapolis, Minnesota
Over the last five years, Mr. Hodder served as Chairman,
President, and Chief Executive Officer until August 1, 1994,
when he assumed his present position.
Mr. Hodder also serves as a director of Tennant Company,
Cowles Media Company, ReliaStar Financial Corporation, and
SUPERVALU INC.; and as a member of the Board of Overseers of
the Carlson School of Management at the University of
Minnesota and the Executive Committee of the Minnesota
Business Partnership, Inc.
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LLOYD P. JOHNSON, 64 Director since 1985
Chairman of the Board and Director
(PICTURE) Norwest Corporation
Minneapolis, Minnesota
Over the last five years, Mr. Johnson served as Chairman of
the Board and Chief Executive Officer until January 1, 1993,
when he assumed his present position.
Mr. Johnson also serves as a director of Cargill,
Incorporated, Musicland Stores Corporation, and Valmont
Industries, Inc.; as a member of the Advisory Board of
Minnegasco; as a trustee of the Minnesota Mutual Life
Insurance Company; as Vice Chairman of the Board of Trustees
and Chairman of the Capital Campaign of Carleton College; as
Chairman of the Board of Trustees of the Minneapolis
Institute of Arts; and as a member of the Board of Overseers
of the Carlson School of Management at the University of
Minnesota.
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REATHA CLARK KING, 56 Director since 1986
President and Executive Director
(PICTURE) General Mills Foundation
(Charitable Foundation for General Mills, Inc.)
Minneapolis, Minnesota
Dr. King also serves as a director of H.B. Fuller Company,
the Minnesota Council on Foundations, and the Corporation for
National Service; as a trustee of the Minnesota Mutual Life
Insurance Company and the University of Chicago; and as a
member of the Board of Managers of the Ministers and
Missionaries Benefit Board of the American Baptist Churches,
New York City.
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RICHARD M. KOVACEVICH, 51 Director since 1986
President and Chief Executive Officer and Director
(PICTURE) Norwest Corporation
Minneapolis, Minnesota
Over the last five years, Mr. Kovacevich served as President
and Chief Operating Officer until January 1, 1993, when he
assumed his present position.
Mr. Kovacevich also serves as a director of ReliaStar
Financial Corporation, Northwestern National Life Insurance
Company, Northern States Power Company, Fingerhut Companies,
Inc., and the Bankers Roundtable; as a director and member of
the Executive Committee of the Minnesota Business
Partnership, Inc.; as Vice Chairman of the Board of The
Greater Minneapolis Metropolitan Housing Corporation; as
Chairman of the American Bankers Council; and as a member of
the Federal Reserve Advisory Council and the Advisory Council
of Stanford University Graduate School of Business.
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RICHARD S. LEVITT, 64 Director since 1982
Chairman of the Board and Director
(PICTURE) Nellis Corporation
(Private Capital Management)
Minneapolis, Minnesota
Mr. Levitt also serves as a director of Meredith Corporation,
Gaylord Container Corporation, the Northwest Area Foundation,
the University of Iowa Law School Foundation, the University
of Iowa Foundation, and Norwest Bank Iowa, N.A., a subsidiary
of the Corporation.
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RICHARD D. MCCORMICK, 54 Director since 1983
Chairman and Chief Executive Officer and Director
(PICTURE) U S WEST, Inc.
(Communications)
Englewood, Colorado
Over the last five years, Mr. McCormick served as President
and Chief Operating Officer of U S WEST, Inc. until December
31, 1990, when he was elected President and Chief Executive
Officer. Effective May 1, 1992, Mr. McCormick assumed his
present position.
Mr. McCormick also serves as a director of SUPERVALU INC.,
UAL Corporation, and Financial Security Assurance Holdings,
Inc.
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CYNTHIA H. MILLIGAN, 48 Director since 1992
President and Chief Executive Officer
(PICTURE) Cynthia Milligan & Associates
(Consulting Firm to Financial Institutions)
Lincoln, Nebraska
Over the last five years, Ms. Milligan served as Director of
the Nebraska Department of Banking and Finance until January
9, 1991, when she assumed her present position. Ms. Milligan
has also served as Adjunct Professor of Law (Banking) at the
University of Nebraska College of Law.
Ms. Milligan also serves as a director of Norwest Bank
Nebraska, N.A., a subsidiary of the Corporation, and Gallup,
Inc.; as a director and trustee of the University of Nebraska
Foundation; as a trustee of Hastings College; as a director
and a member of the Executive Committee of the Richard Nixon
Library and Birthplace; and as President and a director of
People's City Mission.
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IAN M. ROLLAND, 61 Director since 1993
Chairman and Chief Executive Officer and Director
(PICTURE) Lincoln National Corporation
Lincoln National Life Insurance Company
(Insurance)
Fort Wayne, Indiana
Over the last five years, Mr. Rolland served as President and
Chief Executive Officer of Lincoln National Corporation and
Chairman and President of Lincoln National Life Insurance
Company, until January 1, 1992, when he assumed his present
positions.
Mr. Rolland also serves as a director of Tokheim Corporation,
NIPSCO Industries, Inc., Emphesys Financial Group, Inc., and
Norwest Bank Indiana, N.A., a subsidiary of the Corporation.
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STEPHEN E. WATSON, 50 Director since 1989
President and Director
(PICTURE) Dayton Hudson Corporation
(General Merchandise Company)
Minneapolis, Minnesota
Over the last five years, Mr. Watson served as President of
Dayton Hudson Corporation and also serves as Chairman and
Chief Executive Officer of Dayton Hudson Department Store
Company.
Mr. Watson also serves as a director of the Walker Art
Center, the Minneapolis Downtown Council, and the Minneapolis
Club; as Chairman of the Board of Associated Merchandising
Corporation; and as a member of the Visiting Committee of
Harvard Business School.
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MICHAEL W. WRIGHT, 56 Director since 1991
Chairman, President and Chief Executive Officer, and
(PICTURE) Director
SUPERVALU INC.
(Food Distribution and Retailing)
Minneapolis, Minnesota
Mr. Wright also serves as a director of Cargill,
Incorporated, Musicland Stores Corporation, Honeywell, Inc.,
Shopko Stores, Inc., the National-American Wholesale Grocers
Association, the International Center for Companies of the
Food Trade and Industry, the Independent Grocers Alliance,
Inc., and the Food Marketing Institute; as the 1993 Chairman
of the Campaign of the United Way of Minneapolis; as a member
of the Executive Committee of the Minnesota Business
Partnership, Inc. and the Board of Overseers of the Carlson
School of Management at the University of Minnesota; and as a
trustee of St. Thomas Academy.
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CERTAIN INFORMATION REGARDING
THE BOARD OF DIRECTORS AND COMMITTEES THEREOF
MEETINGS AND COMMITTEES
During the year ended December 31, 1994, the Board of Directors of the
Corporation held 6 regular meetings and 2 special meetings. During 1994,
committees established by the Board met as follows: the Audit and Examination
Committee met 3 times, the Human Resources Committee met 6 times, the Finance
Committee met 4 times, the Credit Committee met 3 times and the Board Affairs
Committee met once. Attendance by directors at these meetings averaged 96%
during 1994, with all directors attending more than 75% of the aggregate number
of Board meetings and meetings of committees on which he or she served.
The members of the Audit and Examination Committee are William A. Hodder
(Chair), David A. Christensen, N. Berne Hart, Richard S. Levitt, Cynthia H.
Milligan, Ian M. Rolland, and Stephen E. Watson. The functions performed by the
Committee include: recommendation to the Board of Directors as to engagement of
the independent auditors, review with the independent auditors of the scope and
results of the audit engagement, review of the scope, frequency and results of
internal audits and examinations, review of the adequacy of the Corporation's
system of internal accounting controls, review of bonding and insurance
coverage, and review of examination reports of the Corporation. Effective April
1, 1995, the members of the Audit and Examination Committee will be Richard S.
Levitt (Chair), David A. Christensen, Gerald J. Ford, Cynthia H. Milligan, Ian
M. Rolland, and Stephen E. Watson.
The members of the Human Resources Committee are Pierson M. Grieve (Chair),
Charles M. Harper, Richard D. McCormick, John E. Pearson, and Michael W.
Wright. The Committee recommends to the Board of Directors the election of and
remuneration arrangements for senior management. The Committee also approves
the adoption of benefit and compensation plans in which officers are eligible
to participate and approves awards under such compensation plans. Effective
April 1, 1995, the members of the Human Resources Committee will be Pierson M.
Grieve (Chair), Charles M. Harper, William A. Hodder, Richard D. McCormick, and
Michael W. Wright.
The members of the Board Affairs Committee are John E. Pearson (Chair), David
A. Christensen, and Richard D. McCormick. The Committee reviews and makes
recommendations to the Board of Directors regarding proposed directors, the
compensation of directors and the composition and size of the Board and its
committees. The Committee will consider qualified nominees recommended by
stockholders of the Corporation if any such recommendation is submitted in
writing to the Secretary of the Corporation no later than the December 31
preceding the annual meeting. Such recommendations must include information
which will enable the Committee to evaluate the qualifications of the
recommended nominee. Effective with the 1995 annual meeting of stockholders,
the Committee's responsibilities have been expanded to include reviewing and
making recommendations to the Board of Directors regarding the Board meeting
schedule and agenda, and the information provided at meetings, and matters
related to the effectiveness of the Board of Directors. In addition, the
Committee Chair will determine the agenda for, and chair executive sessions of
the Board of Directors at which management directors are not present, and
coordinate the chief executive officer evaluation process for the Board.
Effective April 1, 1995, the members of the Board Affairs Committee will be
William A. Hodder (Chair), David A. Christensen, Pierson M. Grieve, and Richard
S. Levitt.
The members of the Finance Committee are Richard D. McCormick (Chair), David
A. Christensen, Gerald J. Ford, N. Berne Hart, William A. Hodder, Richard S.
Levitt, Cynthia H. Milligan, John E. Pearson, and Ian M. Rolland. The Committee
reviews and makes recommendations to the Board of Directors regarding the
Corporation's annual and long-term financial plans, including proposed debt and
equity issues. The Committee also reviews the policies of the Corporation with
respect to capital structure and investment portfolio composition. Effective
April 1, 1995, the members of the Finance Committee will be Richard D.
McCormick (Chair), Charles M. Harper, Lloyd P. Johnson, Reatha Clark King,
Cynthia H. Milligan, and Ian M. Rolland.
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The members of the Credit Committee are David A. Christensen (Chair), Gerald
J. Ford, George C. Howe, Reatha Clark King, Richard S. Levitt, Stephen E.
Watson, and Michael W. Wright. The Committee reviews credit policies and
examination reports, trends in domestic and international loans outstanding,
and the adequacy of the allowance for credit losses. Effective April 1, 1995,
the members of the Credit Committee will be David A. Christensen (Chair),
Gerald J. Ford, Lloyd P. Johnson, Reatha Clark King, Richard S. Levitt, Stephen
E. Watson, and Michael W. Wright.
COMPENSATION OF DIRECTORS
Annual Retainer and Meeting Fees. In 1994 each non-employee director was paid
an annual cash retainer fee of $22,500 plus $1,000 for each Board meeting or
committee meeting attended. The Chairs of the Audit and Examination, Human
Resources, Finance, and Credit Committees also received an additional annual
fee of $4,000, and the Chair of the Board Affairs Committee was paid an
additional annual fee of $1,000.
Directors' Plans. Effective January 1, 1992, the Corporation adopted the
Norwest Corporation Directors' Formula Stock Award Plan (the "Directors'
Formula Plan"), which was approved by stockholders at the 1992 annual meeting.
The purpose of the Directors' Formula Plan is to compensate non-employee
directors of the Corporation for their services in the form of shares of the
Corporation's common stock, in order to aid in attracting and retaining
individuals with outstanding abilities and skills for service on the
Corporation's Board of Directors.
Each person who is a non-employee director of the Corporation on December 31
of a calendar year and who served as a non-employee director of the Corporation
during that calendar year (an "Eligible Non-Employee Director") will receive on
February 1 (the "Award Date") of the following year, as compensation for
services rendered in the prior year, an award of shares of common stock of the
Corporation. Under the terms of the Directors' Formula Plan, each Eligible Non-
Employee Director who served as a non-employee director during all of the
preceding calendar year is awarded that number of shares of common stock having
an aggregate fair market value on the Award Date of $18,000 ( an "Award"). The
fair market value of such shares of common stock is computed using the closing
price of a share of the Corporation's common stock as reported on the
consolidated tape of the New York Stock Exchange (the "NYSE"). Each Eligible
Non-Employee Director who served during less than all of the preceding year is
awarded one-twelfth of an Award for each month or portion thereof that he or
she served as a non-employee director.
Effective July 27, 1993, the Board amended the Directors' Formula Plan to
allow each Eligible Non-Employee Director to elect to defer in the form of
shares of the Corporation's common stock all or a portion of his or her Award
otherwise payable in the Corporation's common stock for the calendar year
following the year in which the deferral election is made. Participants in the
Directors' Formula Plan annually elect the percentage of the Award to be
deferred, the year in which the deferred amount will be paid, and a lump sum or
installment payment option. The number of shares so deferred will be credited
to a Deferred Stock Account established for each participating director. When
dividends are paid on the Corporation's common stock, the director's Deferred
Stock Account will be credited with a number of shares determined by
multiplying the number of shares credited to that account on the dividend
record date by the per share dividend amount and then dividing the product by
the average of the high and low market prices of a share of common stock on the
dividend payment date.
The Directors' Formula Plan allows a director to elect distribution of his or
her Deferred Stock Account in a lump sum in the form of whole shares of the
Corporation's common stock. Alternatively, a director may elect distribution of
such credits in the Corporation's common stock in up to 10 annual installments,
the undistributed portion of which will receive credits for shares when
dividends are paid on the Corporation's common stock.
As compensation for services rendered in 1994, Messrs. Christensen, Ford,
Hart, Hodder, Howe, and Rolland, and Dr. King were each issued 750 shares of
the Corporation's common stock pursuant to the terms
10
<PAGE>
of the Directors' Formula Plan, based on a closing price per share of common
stock on the NYSE on January 31, 1995 of $24.00. In addition, 750 shares were
credited to a Deferred Stock Account for each of Messrs. Grieve, Harper,
Levitt, McCormick, Pearson, Watson, and Wright, and Ms. Milligan pursuant to
deferral elections made by these directors.
The Corporation currently has in effect two other plans for non-employee
directors, the "Directors' Stock Deferral Plan" and the "Deferred Compensation
Plan for Non-Employee Directors" (the "Directors' Deferred Compensation Plan"),
pursuant to which a participating director may defer all or a portion of his or
her annual retainer and meeting fees otherwise payable in cash. Such deferral
may be in the form of shares of the Corporation's common stock pursuant to the
Directors' Stock Deferral Plan or in cash pursuant to the Directors' Deferred
Compensation Plan.
The Directors' Stock Deferral Plan, which was approved by the stockholders on
April 28, 1992, is intended to encourage ownership of the Corporation's common
stock by non-employee directors. Any non-employee director may defer all or a
part of his or her annual retainer and meeting fees otherwise payable in cash
for service as a director in the form of shares of the Corporation's common
stock pursuant to the Directors' Stock Deferral Plan. Participants in the
Directors' Stock Deferral Plan annually elect the amount to be deferred and the
year in which the deferred amount will be paid. Amounts so deferred will be
credited to a Deferred Stock Account established for each participating
director. The number of shares credited to a director's Deferred Stock Account
are determined by dividing the amount of the deferred fees earned during a
calendar quarter by the average of the high and low prices of a share of common
stock of the Corporation as reported on the consolidated tape of the NYSE on
the first day of the calendar quarter following the quarter in which the fees
would otherwise have been paid to the participant. When dividends are paid on
the Corporation's common stock, the director's Deferred Stock Account will be
credited with a number of shares determined by multiplying the number of shares
credited to that account on the dividend record date by the per share dividend
amount and then dividing the product by the average of the high and low market
prices of a share of common stock on the dividend payment date.
The Directors' Stock Deferral Plan allows a director to elect distribution of
his or her Deferred Stock Account in a lump sum in the form of cash or whole
shares of the Corporation's common stock, or a combination of both.
Alternatively, a director may elect distribution of such credits in annual cash
installments, the unpaid portion of which will bear interest monthly at an
annual rate equal to the interest equivalent of the secondary market yield for
three-month U.S. Treasury bills for the preceding month. Deferred compensation
and earnings thereon will be includable in the taxable income of a participant,
and will be deductible by the Corporation, when distributed.
Effective January 1, 1993, the Directors' Stock Deferral Plan replaced those
provisions of the Directors' Deferred Compensation Plan that permitted
participating directors to make deferrals of a cash amount in the form of
shares of the Corporation's common stock to a phantom stock account established
for each participant (a "Phantom Stock Account"). On and after that date, no
further deferrals to the Phantom Stock Accounts may be made, although the value
of the Phantom Stock Accounts will continue to be adjusted to reflect credits
in the form of additional phantom shares when dividends are paid on the
Corporation's common stock until all deferred amounts have been distributed.
Directors may continue, however, to elect deferrals under the Directors'
Deferred Compensation Plan in the form of cash of all or part of their retainer
and meeting fees earned during any calendar year, to be distributed to the
director in a lump sum or in up to 10 annual installments following his or her
termination of service as a director. Amounts deferred in cash are credited to
an unfunded account for the director (a "Deferred Cash Account"). Deferred Cash
Accounts earn interest monthly at a rate per annum equal to the interest
equivalent of the secondary market yield for three-month U.S. Treasury bills
for the preceding month. Under the Directors' Deferred Compensation Plan,
distributions from either a director's Deferred Cash Account or Phantom Stock
Account will be made in cash. In the case of a Phantom Stock Account, such
distributions will be based upon the value of the
11
<PAGE>
Corporation's common stock at the time of distribution. For the year ended
December 31, 1994, a total of $7,109 in interest was credited to Deferred Cash
Accounts and $49,514 in dividends was credited in the form of an aggregate of
2,051 shares to Phantom Stock Accounts for the six current non-employee
directors who are participants in the Directors' Deferred Compensation Plan.
All non-employee directors of the Corporation with five or more years of
service on the Board of the Corporation or one of its subsidiaries are eligible
to participate in the Corporation's Retirement Plan for Non-Employee Directors.
Under this plan, following retirement or other cessation of service as a
director of the Corporation, a participant will receive an annual benefit equal
to the amount of the annual retainer fee payable in cash in effect at the time
of the participant's last day of service on the Board. The annual benefit is
payable in monthly installments for the same number of full years that the
participant served as a non-employee director of either the Corporation or
Norwest Bank Minneapolis, N.A., or a combination of both, up to a maximum of 10
years. Benefits may be deferred by a participant and, if deferred, will bear
interest monthly until payment begins at a rate per annum equal to the interest
equivalent of the secondary market yield for three-month U.S. Treasury bills
for the preceding month. The non-employee director participants in the plan as
of January 1, 1995, and the number of years of service then credited to each
participant's account for purposes of determining the retirement benefit
payable were: Messrs. Christensen, Hodder, Howe, McCormick and Pearson, and Dr.
King, 10 years; Mr. Harper, 9 years; Messrs. Grieve and Levitt, 7 years; and
Mr. Watson, 5 years.
Consulting Agreements with Certain Directors. The Corporation and one of its
national bank subsidiaries have consulting agreements with, respectively,
Gerald J. Ford and Cynthia H. Milligan, both of whom are nominees for re-
election as directors at the annual meeting, as described in more detail below.
On January 19, 1994, the Corporation entered into a consulting agreement with
Gerald J. Ford, a director of the Corporation. Mr. Ford served as the Chief
Executive Officer and Chairman of the Board of First United Bank Group, Inc.
("First United"), a bank holding company with bank affiliates located in Texas
and New Mexico, until January 14, 1994, when First United was acquired by the
Corporation. Under this consulting agreement, the Corporation engaged Mr. Ford
as a consultant for a period of four years, subject to earlier termination as
provided therein. Mr. Ford's responsibilities as a consultant include, among
others, participation in developing appropriate business strategies for the
Corporation and its bank affiliates in Texas and New Mexico, and assistance to
the Corporation in marketing and other business related activities, and
identification of acquisition candidates in those states.
In exchange for his consulting services, Mr. Ford receives an annual
consulting fee of $300,000, payable in equal quarterly installments, plus
reimbursement of all reasonable travel and out-of-pocket expenses in accordance
with the Corporation's existing policies for reimbursement of such expenses for
its senior executive officers. The consulting agreement requires Mr. Ford to
devote such energy and skill in the performance of his consulting
responsibilities in a manner that will diligently further the business and
interests of the Corporation and its subsidiaries, but does not prohibit him
from serving as a director, officer, employee or consultant to any other
company, including any other financial institution, provided such service does
not materially affect the performance of his consulting duties for the
Corporation. During 1994, Mr. Ford received payment of $300,000 in consulting
fees.
The consulting agreement may be terminated by the Corporation as a result of
(i) Mr. Ford's disability based on his absence from his consulting duties, and
failure to return to such duties, for a period of either 3 months or 90 days in
12 consecutive months due to physical or mental illness, (ii) his willful
failure to materially perform his consulting duties, or (iii) his death. Mr.
Ford may terminate the agreement on not less than 60 days notice to the
Corporation. However, if such notice is given less than 60 days prior to the
date a quarterly installment of Mr. Ford's consulting fee is due, the
Corporation is not required to make such quarterly payment.
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<PAGE>
Cynthia H. Milligan, also a director of the Corporation, is the president and
sole owner of Cynthia Milligan & Associates, a consulting firm to financial
institutions based in Lincoln, Nebraska. Cynthia Milligan & Associates performs
such consulting services as may be requested by Norwest Bank Nebraska, N. A., a
national bank subsidiary of the Corporation. During 1994, Cynthia Milligan &
Associates received payments of approximately $28,800 for consulting services
rendered to Norwest Bank Nebraska, N.A.
BENEFICIAL OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
OF EQUITY SECURITIES OF THE CORPORATION
Set forth below is information with respect to shares of common stock of the
Corporation beneficially owned as of February 28, 1995, by the current
directors, the executive officers named in the Summary Compensation Table
herein, and all directors and executive officers of the Corporation as a group.
No director or executive officer of the Corporation beneficially owns any
equity security of the Corporation other than shares of common stock except
James R. Campbell and Reatha Clark King, who own 757 and 300 depositary shares,
respectively, of the Corporation's 10.24% Cumulative Preferred Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME BENEFICIAL OWNERSHIP (1)(2)(3)
---- ------------------------------
<S> <C>
Leslie S. Biller........................... 484,852(4)
James R. Campbell.......................... 480,148(5)
David A. Christensen....................... 12,106
Gerald J. Ford............................. 2,275,308
Pierson M. Grieve.......................... 26,535
Charles M. Harper.......................... 8,096
N. Berne Hart.............................. 105,588(6)
William A. Hodder.......................... 11,936
George C. Howe............................. 6,096
Lloyd P. Johnson........................... 1,875,828(7)
Reatha Clark King.......................... 6,218
Richard M. Kovacevich...................... 852,539(8)
Richard S. Levitt.......................... 44,197
Richard D. McCormick....................... 6,578
Cynthia H. Milligan........................ 1,861
Kenneth R. Murray.......................... 569,731(9)
John E. Pearson............................ 10,596
Ian M. Rolland............................. 6,509
Daniel A. Saklad........................... 386,856(10)
Stephen E. Watson.......................... 2,900
Michael W. Wright.......................... 7,019
All directors and executive officers as a
group
(31 individuals).......................... 8,621,289(11)
</TABLE>
- ---------------------
(1) Each individual owns less than 1% and all directors and executive officers
as a group own 2.8% of the outstanding shares of common stock of the
Corporation.
(2) Amounts shown include shares allocated to participants' accounts in the
Norwest stock funds held in trust under the Corporation's Savings-
Investment Plan. Under the plan, a participant has the power to direct the
voting of the shares held in trust based on the ratio of the value of such
participant's accounts in such funds to the total value of such funds on a
valuation date not more than 90 days preceding the record date for the
applicable stockholders' meeting. Shares held in trust on the applicable
record date will be voted by the trustee of the trust ratably based on the
instructions of all participants who give instructions. The numbers of
shares allocated to the accounts of the named executive officers, as of
13
<PAGE>
September 30, 1994, were: Mr. Biller, 10,065 shares; Mr. Campbell, 17,081
shares; Mr. Kovacevich, 31,754 shares; Mr. Murray, 28,964 shares; and Mr.
Saklad, 9,795 shares. There were 9,313 shares allocated to an account for
Mr. Levitt, a director and former officer; 20,490 shares allocated to an
account for Mr. Johnson, a director and executive officer; and 214,830
shares allocated to the accounts of all directors and executive officers as
a group.
Amounts shown also include shares of common stock of the Corporation
credited as of September 30, 1994, to executive officers' accounts under
the Supplemental Savings-Investment Plan. The Corporation has deposited
shares of its common stock in trust to be used to satisfy in part its
obligations under said plan. The numbers of shares credited to the named
executive officers' accounts as of September 30, 1994, were: Mr. Biller,
12,082 shares; Mr. Campbell, 9,052 shares; Mr. Kovacevich, 31,052 shares;
Mr. Murray, 14,954 shares; and Mr. Saklad, 9,924 shares. There were 35,514
shares credited to an account for Mr. Johnson, a director and executive
officer; and 137,309 shares credited to the accounts of all directors and
executive officers as a group.
Amounts shown also include shares credited as of December 31, 1994, to
executive officers' deferral accounts under the Executive Incentive
Compensation Plan. The Corporation has deposited shares in trust to be
used to satisfy in part its obligations under said plan. The numbers of
shares credited as of December 31, 1994 to deferral accounts for the named
executive officers were: Mr. Campbell, 512 shares; and Mr. Murray, 35,925
shares. There were 44,034 shares credited to an account for Mr. Johnson, a
director and executive officer; and 84,547 shares credited to the accounts
of all directors and executive officers as a group.
Amounts shown also include shares credited as of December 31, 1994, to
executive officers' deferred accounts under the Employees' Stock Deferral
Plan. The Corporation has deposited shares in trust to be used to satisfy
in part its obligations under said plan. The number of shares credited as
of December 31, 1994 to deferral accounts for the named executive officers
were: Mr. Biller, 29,265 shares; and Mr. Campbell, 2,279 shares.
Amounts shown also include shares credited as of February 28, 1995, to
certain outside directors' Deferred Stock Accounts under the Directors'
Stock Deferral Plan and the Directors' Formula Stock Award Plan. The
Corporation has deposited shares in trust to be used to satisfy in part
its obligations under said plans. The numbers of shares credited to
Deferred Stock Accounts under the Directors' Stock Deferral Plan were: Mr.
Christensen, 3,610 shares; Mr. Grieve, 3,039 shares; Mr. Harper, 2,596
shares; Mr. Hodder, 3,240 shares; Mr. Levitt, 3,199 shares; Mr. Pearson,
3,206 shares; Mr. Rolland, 1,475 shares; and Mr. Wright, 2,877 shares. The
number of shares credited to Deferred Stock Accounts under the Directors'
Formula Stock Award Plan were: Messrs. Grieve and Pearson, 750 shares;
Messrs. Harper, Levitt, McCormick, Watson and Wright, and Ms. Milligan,
895 shares.
(3) Amounts shown do not include the following share equivalents which were
credited as of February 28, 1995, to participants' Phantom Stock Accounts
under the Corporation's Deferred Compensation Plan for Non-Employee
Directors: Mr. Christensen, 18,274 shares; Mr. Grieve, 14,565 shares; Mr.
Harper, 6,633 shares; Mr. Hodder, 16,473 shares; Mr. Levitt, 8,518 shares;
and Mr. Wright, 1,572 shares.
(4) Mr. Biller is one of the executive officers listed in the Summary
Compensation Table on page 23 of this proxy statement. In addition to
shares credited to Mr. Biller's accounts under the plans described in
footnote (2) above, the amount shown includes 22,950 shares held by Mr.
Biller's spouse, 800 shares held in an irrevocable trust for Mr. Biller's
daughter for which Mr. Biller is co-trustee, 238,934 shares which Mr.
Biller has the right to acquire within 60 days after February 28, 1995,
through the exercise of stock options, 39,840 shares of restricted stock,
and 5,402 shares subject to restrictions on transfer of ownership.
14
<PAGE>
(5) Mr. Campbell is one of the executive officers listed in the Summary
Compensation Table on page 23 of this proxy statement. In addition to
shares credited to Mr. Campbell's accounts under the plans described in
footnote (2) above, the amount shown includes 43,950 shares held by Mr.
Campbell's spouse, 200 shares held by Mr. Campbell's minor son, 1,740
shares held in irrevocable trusts for Mr. Campbell's minor daughter and
son, 43,500 shares held in a trust of which Mr. Campbell is a beneficiary,
287,798 shares which Mr. Campbell has the right to acquire within 60 days
after February 28, 1995, through the exercise of stock options, 20,000
shares of restricted stock, and 5,402 shares subject to restrictions on
transfer of ownership.
(6) This amount includes 540 shares held by Mr. Hart's spouse.
(7) In addition to shares credited to Mr. Johnson's accounts under the plans
described in footnote (2) above, the amount shown includes 341,425 shares
held in a trust of which Mr. Johnson is a beneficiary, 1,109,096 shares
which Mr. Johnson has the right to acquire within 60 days after February
28, 1995, through the exercise of stock options, 55,320 shares of
restricted stock, and 269,949 shares held in a revocable trust for which
Mr. Johnson is settlor and trustee.
(8) Mr. Kovacevich is one of the executive officers listed in the Summary
Compensation Table on page 23 of this proxy statement. In addition to
shares credited to Mr. Kovacevich's accounts under the plans described in
footnote (2) above, the amount shown includes 414 shares held by Mr.
Kovacevich's spouse, 4,438 shares held by Mr. Kovacevich's spouse as
custodian for his minor daughter under the UGMA, 8,876 shares held in
revocable trusts for Mr. Kovacevich's daughter and son for which Mr.
Kovacevich is co-trustee, 72,560 shares held in a trust of which Mr.
Kovacevich is a beneficiary, 306,409 shares which Mr. Kovacevich has the
right to acquire within 60 days after February 28, 1995, through the
exercise of stock options, 57,750 shares of restricted stock, and 8,897
shares subject to restrictions on transfer of ownership.
(9) Mr. Murray is one of the executive officers listed in the Summary
Compensation Table on page 23 of this proxy statement. In addition to
shares credited to Mr. Murray's accounts under the plans described in
footnote (2) above, the amount shown includes 370 shares held by Mr.
Murray's spouse, 162 shares held in an IRA by Mr. Murray's brother over
which Mr. Murray has power of attorney and in which he has an indirect
beneficial interest, 53,017 shares held in a trust of which Mr. Murray is
a beneficiary, 282,924 shares which Mr. Murray has the right to acquire
within 60 days after February 28, 1995, through the exercise of stock
options, 39,840 shares of restricted stock, and 5,402 shares subject to
restrictions on transfer of ownership.
(10) Mr. Saklad is one of the executive officers listed in the Summary
Compensation Table on page 23 of this proxy statement. In addition to
shares credited to Mr. Saklad's accounts under the plans described in
footnote (2) above, the amount shown includes 63,155 shares held in a
trust of which Mr. Saklad is a beneficiary, 181,559 shares which Mr.
Saklad has the right to acquire within 60 days after February 28, 1995,
through the exercise of stock options, 39,840 shares of restricted stock,
5,402 shares subject to restrictions on transfer of ownership, and 77,181
shares held in a revocable trust for which Mr. Saklad is settlor and
trustee.
(11) The amount shown includes 7,181,497 shares listed opposite the names of
the 21 directors and executive officers (including directors who are
executive officers) named in the above table, and the remaining 1,439,792
shares include: (i) 398,450 shares held by 10 executive officers,
including 68,100 shares of restricted stock held by 5 executive officers;
(ii) 346 shares held by spouses of 2 executive officers; (iii) 87,369
shares allocable as of September 30, 1994, to the accounts of 10 executive
officers under the Savings-Investment Plan; (iv) 24,731 shares credited as
of September 30, 1994, to the accounts of 8 executive officers under the
Supplemental Savings-Investment Plan; (v) 4,077 shares credited as of
December 31, 1994, to the account of one executive officer under the
Executive Incentive Compensation Plan; and (vi) 856,719 shares which 10
executive officers have the right to acquire within 60 days after February
28, 1995, through the exercise of stock options.
15
<PAGE>
EXECUTIVE OFFICERS
Information regarding the current executive officers of the Corporation,
including their names, ages, positions with the Corporation, and a brief
description of their business experience during the past five years, is
presented below. Executive officers are elected annually by the Board of
Directors.
Lloyd P. Johnson, 64, Chairman of the Board and a director. Mr. Johnson has
been associated with Norwest for the past 10 years. Additional information
regarding Mr. Johnson is set forth on page 5.
Richard M. Kovacevich, 51, President and Chief Executive Officer and a
director. Mr. Kovacevich has been associated with Norwest for the past 9 years.
Additional information regarding Mr. Kovacevich is set forth on page 6.
Leslie S. Biller, 47, Executive Vice President (South Central Banking). Mr.
Biller served as Executive Vice President (Strategic Planning and Acquisitions)
for the Corporation until July 30, 1990, when he assumed his present position.
Mr. Biller has been associated with Norwest for the past 7 years.
James R. Campbell, 52, Executive Vice President (Twin Cities Banking). Mr.
Campbell served as Executive Vice President (Corporate Banking) until February
23, 1993, when he assumed his present position. He also serves as President and
Chief Executive Officer of Norwest Bank Minnesota, N.A. Mr. Campbell has been
associated with Norwest for the past 30 years.
Thomas E. Emerson, 44, Senior Vice President, Chief Auditor and Chief
Examiner. Mr. Emerson served as Vice President and Audit Director of Norwest
Audit Services, Inc. until April 26, 1994, when he assumed his present
position. Mr. Emerson has been associated with Norwest for the past 8 years.
John E. Ganoe, 50, Senior Vice President (Strategic Planning and
Acquisitions). Mr. Ganoe served as Vice President, Director of Strategic
Planning and Acquisitions until September 25, 1990, when he assumed his present
position. Mr. Ganoe has been associated with Norwest for the past 12 years.
Michael A. Graf, 56, Senior Vice President and Controller. Mr. Graf has held
his present position since February 1988. He has been associated with Norwest
for the past 7 years.
Stephen W. Hansen, 53, Senior Vice President (Human Resources). Mr. Hansen
has held his present position since September 1987. He has been associated with
Norwest for the past 7 years.
Laurel A. Holschuh, 44, Senior Vice President, Assistant General Counsel and
Secretary. Ms. Holschuh served as Vice President, Assistant General Counsel and
Assistant Secretary until April 23, 1991, when she was elected Vice President,
Assistant General Counsel and Secretary. On April 27, 1993, she assumed her
present position. Ms. Holschuh has been associated with Norwest for the past 15
years.
Kenneth R. Murray, 56, Executive Vice President (Western Banking). Mr. Murray
served as Executive Vice President and head of Community Banking until July 30,
1990, when he assumed his present position. Mr. Murray has been associated with
Norwest for the past 12 years.
Brian R. Phillips, 55, Executive Vice President (Technical Services). Mr.
Phillips has held his present position since February 1986. He has been
associated with Norwest for the past 9 years.
William H. Queenan, 56, Executive Vice President (Chief Credit Officer). Mr.
Queenan has held his present position since May 1987. He has been associated
with Norwest for the past 22 years.
Daniel A. Saklad, 52, Executive Vice President (North Central Banking). Mr.
Saklad has held his present position since September 1989. He has been
associated with Norwest for the past 7 years.
Stanley S. Stroup, 51, Executive Vice President and General Counsel. Mr.
Stroup served as Senior Vice President, General Counsel and Secretary of the
Corporation until April 23, 1991, when he became Senior Vice President and
General Counsel. On February 23, 1993, he assumed his present position. Mr.
Stroup has been associated with Norwest for the past 11 years.
16
<PAGE>
John T. Thornton, 57, Executive Vice President and Chief Financial Officer.
Mr. Thornton has held his present position since October 1987. Mr. Thornton has
been associated with Norwest for the past 11 years.
Charles D. White, 50, Senior Vice President and Treasurer. Mr. White served
as Senior Vice President of Norwest Bank Minnesota, N.A. and Banking Group
Treasurer until July 27, 1993, when he assumed his present position. Mr. White
has been associated with Norwest for the past 13 years.
EXECUTIVE COMPENSATION
REPORT OF THE HUMAN RESOURCES COMMITTEE ON EXECUTIVE COMPENSATION
The Human Resources Committee of the Board of Directors (the "Committee")
determines annually the compensation (including awards under compensation
plans) to be paid to the Corporation's chief executive officer and other
executive officers, including the executive officers named in the Summary
Compensation Table. This Report discusses the objectives and procedures used by
the Committee to establish 1994 compensation for the chief executive officer
and the four other executive officers named in the Summary Compensation Table.
OBJECTIVES
The Committee's executive officer compensation policies are structured to
enable the Corporation to compete favorably with the largest banking
institutions and other large corporations in the United States in attracting
and retaining highly-qualified individuals as executive officers and to pay
executive officers based on their contributions to the Corporation's
performance. The Committee adopted its "Performance-Based Compensation Policy
for Covered Executive Officers" (the "Performance-Based Compensation Policy" or
the "Policy") effective for the year commencing January 1, 1994, in response to
the enactment in 1993 of Section 162(m) of the Internal Revenue Code and the
issuance by the Internal Revenue Service of related proposed regulations. This
legislation and the proposed regulations limit the ability of a publicly-held
corporation to deduct annual compensation in excess of $1,000,000 paid to
certain highly-compensated executive officers, unless such compensation is
contingent on the attainment of pre-established performance goals based on
business criteria and a maximum compensation amount which have been disclosed
to and approved by the stockholders. The Performance-Based Compensation Policy,
which sets forth such business criteria and maximum compensation, was approved
by stockholders at the 1994 annual meeting.
As a result of the adoption of the Policy, the 1994 annual incentive
compensation for the executive officers named in the Summary Compensation Table
set forth in the proxy statement, including the chief executive officer, was
based on each such executive officer's attainment of one or more pre-
established performance goals, subject to the maximum compensation amount set
forth in the Policy. The terms of the Policy, and the procedures used by the
Committee to make incentive compensation awards thereunder, are discussed in
greater detail in this Report under the heading "Executive Officer
Compensation--Annual Compensation."
EXECUTIVE OFFICER COMPENSATION
Compensation for the executive officers named in the Summary Compensation
Table consists primarily of annual compensation (comprised of base salary and
an incentive compensation award under the Policy) and long-term compensation.
As described more fully below, base salary ranges for executive officers are
developed using available competitive compensation data for the immediately
preceding fiscal year from a comparison group of banking organizations. Annual
incentive compensation (payable in cash or in the form of stock, including
restricted stock) is determined for the executive officers named in the Summary
Compensation Table pursuant to the Performance-Based Compensation Policy. Long-
term compensation for such officers, awarded in the form of stock options
pursuant to the Corporation's 1985 Long-Term Incentive
Compensation Plan (the "LTICP"), is determined by the Committee. Although the
following discussion applies generally to the Committee's determination of the
1994 annual salary and incentive compensation
17
<PAGE>
and long-term compensation for Mr. Kovacevich as chief executive officer of the
Corporation, a more complete description of Mr. Kovacevich's 1994 compensation
based on the Corporation's 1994 performance is set forth below under the
heading "Chief Executive Officer".
Annual Compensation. For purposes of establishing base salaries and
determining final annual incentive compensation awards pursuant to the
Performance-Based Compensation Policy, the Committee considered available
competitive compensation data from a comparison group (the "Comparison Group")
of banking organizations included in the "Peer Group Index" for purposes of the
performance graph set forth in the proxy statement for the 1994 annual meeting
of stockholders./1/
Individual base salaries for executive officers other than Mr. Kovacevich are
recommended by the Corporation's chief executive officer and approved by the
Committee. Mr. Kovacevich's base salary is determined by the Committee.
Salaries are reviewed annually and adjusted periodically, typically at
intervals of 12 months or more. Adjustments are based on the relationship of
the executive officer's current salary to the base salary range for the
position and a subjective evaluation of overall performance. Base salaries paid
in 1994 to executive officers named in the Summary Compensation Table were near
the median of estimated base salaries paid by the Comparison Group banks.
Annual incentive compensation (payable in cash or in the form of stock,
including restricted stock) for a "Covered Executive Officer" is governed by
the Performance-Based Compensation Policy. The Policy defines a "Covered
Executive Officer" of the Corporation as an individual who, on the last day of
a taxable year, is the chief executive officer of the Corporation or is acting
in such capacity or is among the four highest compensated executive officers
(other than the chief executive officer) of the Corporation determined pursuant
to the executive compensation disclosure rules under the Securities Exchange
Act of 1934. Each of the persons named in the Summary Compensation Table set
forth in the proxy statement is a Covered Executive Officer under the
Performance-Based Compensation Policy.
Under the Performance-Based Compensation Policy, payment of an incentive
compensation award to a Covered Executive Officer is contingent upon the
attainment of one or more performance goals (which may be stated as alternative
goals) established in writing by the Committee for a Covered Executive Officer
at the beginning of each "Performance Period". The Committee retains the
discretion under the Policy to reduce
- ---------------------
/1The/Comparison Group, for purposes of 1994 compensation, consisted of the
following 31 banking organizations: BancOne Corporation, BankAmerica
Corporation, Bank of Boston Corporation, Bank of New York, Barnett Banks,
Inc., Boatmen's Bancshares, Chase Manhattan Corporation, Chemical Banking
Corporation, Citicorp, Comerica, Inc., CoreStates Financial Corporation,
First Bank System, Inc., First Chicago Corporation, First Fidelity
Bancorporation, First Interstate, First of America, First Union Corporation,
Fleet Financial Group, Inc., KeyCorp, Mellon Bank Corporation, NBD Bancorp,
National City Corporation, NationsBank, Norwest Corporation, PNC Bank
Corporation, Republic New York Corporation, State Street Boston Corporation,
SunTrust Banks, Inc., U.S. Bancorp, Wachovia Corporation, and Wells Fargo &
Co. The "Peer Group Index," for purposes of the performance graph included in
the Corporation's annual proxy statement, is defined as the "35 largest
banking organizations (ranked based on their total assets as of December 31
of the immediately preceding fiscal year) included in the Salomon 50-Bank
Index published by Salomon Brothers in the first February issue of "Bank
Stock Weekly" of the year in which the annual meeting will be held. (See page
22 for a listing of the banking organizations constituting the 1995 Peer
Group Index for purposes of the performance graph.) Although most of the
banks in the Comparison Group are also included in the 1995 Peer Group Index,
the two groups are not identical. The differences reflect, in part, changes
in the composition of the Peer Group Index due to mergers occurring in 1994
and the fact that 1994 salary and long-term compensation decisions are made
before the 1995 Peer Group Index can be determined. They also reflect the
Committee's decision to eliminate J.P. Morgan & Co. and Bankers Trust
Corporation of New York from the Comparison Group for 1994 incentive
compensation purposes, because the businesses of such banks are not, in the
Committee's judgement, comparable to the businesses of the Corporation.
18
<PAGE>
the incentive compensation award payable to a Covered Executive Officer from
the maximum award permitted by the Policy, notwithstanding the attainment of
any performance goal. In the exercise of this discretion, the Committee
reviews available competitive market data from the prior fiscal year and
reasonable estimates with respect to incentive compensation to be paid by the
Comparison Group banks to their executive officers for the most recently
completed fiscal year. With respect to the chief executive officer, the
Committee also considers the quality of the Corporation's earnings based on
certain factors, as discussed below under the heading "Chief Executive
Officer." For Covered Executive Officers other than the chief executive
officer, the Committee also reviews the chief executive officer's
recommendations.
For the Performance Period commencing January 1 and ending December 31,
1994, the Committee established alternative performance goals for each Covered
Executive Officer, including Mr. Kovacevich as chief executive officer, based
on the Corporation's "Earnings Per Share" and "Return on Common Equity," as
those business criteria are defined in the Performance-Based Compensation
Policy. In addition, for each Covered Executive Officer, other than Mr.
Kovacevich, the Committee established an additional alternative performance
goal based on the "Business Unit Net Earnings" (as defined in the Performance-
Based Compensation Policy) of the business unit of the Corporation managed by
each such Covered Executive Officer.
As set forth in the Performance-Based Compensation Policy, the maximum
amount of an incentive compensation award payable for any Performance Period
to any Covered Executive Officer who has attained one or more of his or her
pre-established performance goals may not exceed four-tenths of one percent
(.4%) of the Corporation's Net Income/2/ for the Performance Period. Based on
the Corporation's 1994 Net Income of $800.4 million, the maximum incentive
compensation award payable under the Policy would have been $3,201,600 (.4% of
$800.4 million).
For the 1994 Performance Period, each Covered Executive Officer, including
Mr. Kovacevich, met their respective performance goals. Based on the
Committee's certification that each Covered Executive Officer had met such
performance goals established by the Committee, its review of projected 1994
executive officer incentive compensation data from the Comparison Group and
recommendations of the chief executive officer, the Committee awarded to the
executive officers named in the Summary Compensation Table, an incentive award
under the Performance-Based Compensation Policy consisting of cash in the
amount shown in column (d) of the Summary Compensation Table. No Covered
Executive Officer, including the chief executive officer, received the maximum
incentive compensation award under the Policy.
Long-Term Compensation. Long-term compensation is provided in the form of
stock options granted under the LTICP and is intended to increase management
ownership of stock and to provide an incentive to executive officers to
improve long-term corporate performance. Each executive officer is assigned
stock ownership goals expected to be achieved by specified dates. Once the
basic ownership level is achieved the goal continues to increase each time an
executive officer exercises a stock option or a restricted stock grant vests.
The primary means for executive officers to achieve these goals is through the
exercise of stock options and the retention of a substantial portion of the
stock acquired. All executive officers named in the Summary Compensation Table
have exceeded their ownership goals.
For 1994, each executive officer named in the Summary Compensation Table
received the stock option grants shown in column (g) of the table. Under the
proposed regulations discussed above with respect to the
- ---------------------
/2For/purposes of the Policy, the term "Net Income" means the Corporation's
net income as reported in the Corporation's consolidated financial
statements for the applicable Performance Period, adjusted to eliminate the
effect of (1) restatements of prior periods' financial results relating to
an acquisition accounted for as a pooling of interests; (2) losses resulting
from discontinued operations; (3) extraordinary gains or losses; (4) the
cumulative effect of changes in generally accepted accounting principles;
and (5) any other unusual, non-recurring gain or loss which is separately
identified and quantified in the Corporation's financial statements.
19
<PAGE>
Performance-Based Compensation Policy, stock options granted by the Committee
under the LTICP are considered performance-based compensation and are thus not
subject to the Policy.
In determining these option grants, the Committee considered the number of
shares of common stock owned by the executive officer relative to the executive
officer's ownership goal, and the stock option grant practices of the
Comparison Group at the time of grant. If the executive officer does not meet
his or her stock ownership goal, the number of stock options granted by the
Committee to such executive officer in the future will be less than competitive
practice. The Committee encourages executive officers to achieve their stock
ownership goals by including in original option grants, as in the case of the
stock option grants in 1994, the right to acquire an Accelerated Ownership Non-
Qualified Stock Option (an "AO"). Upon exercise of the original option using
shares of previously owned common stock, the optionee is granted an AO to
purchase the same number of whole shares of stock, at their fair market value
on the date of the AO grant, as were used to pay the purchase price of the
shares acquired upon exercise of the original option and related taxes. AO
grants are exerciseable at any time over the remaining term applicable to the
original option. Such grants allow the exercise of the original option early in
its term while preserving the executive officer's opportunity for future
appreciation in the shares exchanged to exercise the original option. The
Committee believes that the AO feature in original option grants encourages
executive officers to acquire and retain the Corporation's stock. The 1994
original stock option grants to the chief executive officer and the four
executive officers named in the Summary Compensation Table included this AO
feature. In addition, three of such executive officers, as well as Mr.
Kovacevich, received AO grants in 1994 as the result of their exercise of
original stock options granted prior to 1994 that had the AO feature.
Other Compensation. Executive officers also receive various perquisites and
supplemental retirement benefits of a type and value comparable to those made
available to executive officers of Comparison Group banking organizations, as
well as retirement and medical benefits generally available to the
Corporation's employees.
Chief Executive Officer. Mr. Kovacevich's 1994 salary as shown in the Summary
Compensation Table was determined by the Committee in accordance with the
salary procedures described above for Covered Executive Officers. With respect
to Mr. Kovacevich's incentive award under the Performance-Based Compensation
Policy, the Committee certified that Mr. Kovacevich had exceeded his
performance goals based on the Corporation's 1994 Earnings Per Share and Return
on Common Equity, and thus was eligible to receive the maximum amount for an
incentive compensation award under the Policy, subject to reduction of the
amount of such award in the Committee's discretion. In connection with the
exercise of this discretion, the Committee evaluated the quality of the
Corporation's earnings based on its review of the following factors: earnings
growth, return on common equity, return on total assets, common equity as a
percentage of total assets, non-performing assets and loan loss reserves,
respectively, as a percentage of total assets, the 12-month rate of return to
stockholders (including stock price performance and total return), the ratio of
the Corporation's common stock market price to its book value, and the ratio of
the Corporation's total non-interest expense to its total revenue. In
evaluating the Corporation's overall performance for purposes of determining
Mr. Kovacevich's incentive award under the Performance-Based Compensation
Policy, subject to the maximum amount set forth in the Policy, the Committee
also compared the Corporation's performance to that of banking organizations
included in the Comparison Group using these same factors. Mr. Kovacevich's
1994 incentive award was finally determined in the exercise of the Committee's
discretion in light of its subjective evaluation of the Corporation's overall
performance and the quality of its earnings based on its assessment of the
factors set forth above compared to the performance of the Comparison Group and
the aggregate compensation paid by Comparison Group banks to their chief
executive officers.
Based on Mr. Kovacevich's achievement of his performance goals, and the
Committee's exercise of its discretion under the Performance-Based Compensation
Policy, the Committee awarded incentive compensation for 1994 to Mr. Kovacevich
under the Policy of $2,662,275, of which $2,155,000 was payable in cash, and
$507,275 was paid in the form of 19,700 shares of restricted stock (valued
based on a closing
20
<PAGE>
market price of $25.75 on February 28, 1995, the date of the award). That
portion of the incentive compensation award under the Policy paid to Mr.
Kovacevich in the form of shares of restricted stock is subject to certain
vesting requirements and may be forfeited, except in the case of death,
disability, retirement or change of control of the Corporation, unless Mr.
Kovacevich is continuously employed by the Corporation or an affiliate until
the restrictions lapse. Prior to the lapse of the restrictions, Mr. Kovacevich
is entitled to vote and receive dividends on the restricted shares but may not
sell or otherwise transfer the shares. The restrictions on the restricted stock
grant included in Mr. Kovacevich's 1994 incentive compensation award lapse in
1998 as to 30% of the shares, in 1999 as to an additional 40% of the shares,
and in 2000 with respect to the remainder of the shares. That portion of Mr.
Kovacevich's incentive compensation award under the Performance-Based
Compensation Policy made in the form of restricted shares is governed by the
provisions (other than the provisions with respect to the computation of the
award) of the LTICP. Mr. Kovacevich also was granted stock options for 530,000
shares, pursuant to the LTICP, based on the Committee's evaluation of
competitive compensation paid in the form of stock options by banking
organizations included in the Comparison Group to their chief executive
officers. Mr. Kovacevich also was granted an AO for 102,610 shares in 1994 as
the result of his exercise of an original option granted prior to 1994 that had
the AO feature described above.
Members of the Committee:
Pierson M. Grieve, Chairman
Charles M. Harper
Richard D. McCormick
John E. Pearson
Michael W. Wright
21
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The Performance Graph set forth below compares the cumulative total
stockholder return on the Corporation's ("Norwest") common stock for the last
five fiscal years with the cumulative total return on the S&P 500 Index and a
peer group stock performance index defined as follows: the 35 largest banking
organizations (ranked based on their total assets as of December 31 of the
immediately preceding fiscal year) included in the Salomon 50-Bank Index
published by Salomon Brothers in the first February issue of "Bank Stock
Weekly" of the year in which the annual meeting will be held (the "Peer Group
Index"). The cumulative total stockholder return computations set forth in the
Performance Graph assume the investment of $100 in Norwest common stock, the
S&P 500 Index and the Peer Group Index on December 31, 1989, and reinvestment
of all dividends.
The 35 banking organizations (ranked based on total assets as of December 31,
1994) that constitute the Peer Group Index are as follows: Citicorp,
BankAmerica Corporation, Chemical Banking Corporation, NationsBank, J.P. Morgan
& Co., Chase Manhattan Corporation, Bankers Trust Corporation of New York,
BancOne Corporation, First Union Corporation, First Chicago Corporation, Key
Corp, PNC Bank Corporation, Norwest Corporation, Wells Fargo & Co., Bank of New
York, First Interstate, Fleet Financial Group, Inc., NBD Bancorp, Bank of
Boston Corporation, SunTrust Banks, Inc., Barnett Banks, Inc., Republic New
York Corporation, Wachovia Corporation, Mellon Bank Corporation, First Fidelity
Bancorporation, Comerica, Inc., National City Corporation, Boatmen's
Bancshares, CoreStates Financial Corporation, First Bank System, Inc., First of
America, State Street Boston Corporation, U.S. Bancorp, Northern Trust
Corporation, and Huntington Bancshares.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
LOGO
<TABLE>
------------------------------
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1989 1990 1991 1992 1993 1994
- -----------------------------------------------------
NORWEST $100.0 $96.5 $175.5 $213.3 $247.5 $244.4
- -----------------------------------------------------
S&P 500 $100.0 $96.9 $126.3 $136.9 $149.5 $151.6
- -----------------------------------------------------
PEER GROUP $100.0 $78.9 $124.2 $171.0 $185.7 $178.2
</TABLE>
- --------------------------------------------------------------------------------
22
<PAGE>
COMPENSATION
The following table sets forth the cash and noncash compensation earned or
awarded for the last three years to the chief executive officer of the
Corporation and the four other most highly compensated executive officers of
the Corporation.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------------- --------------------------
(A) (B) (C) (D) (E) (F) (G) (I)
RESTRICTED
NAME AND PRINCIPAL OTHER ANNUAL STOCK OPTIONS/ ALL OTHER
POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION($)(2) AWARD(S)($)(3)(4) SARS(#) COMPENSATION($)(6)
------------------ ---- --------- ----------- ------------------ ----------------- -------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard M. Kovacevich 1994 $745,000 $2,155,000 $19,226 $460,487(5) 633,610 120,540
President and Chief 1993 700,000 1,596,875 26,230 0 202,799 472,875
Executive Officer 1992 625,000 786,000 13,425 195,688 0 75,000
Leslie S. Biller 1994 450,000 905,000 14,104 0 245,756 67,740
Executive 1993 430,000 879,531 20,231 408,750 47,050 46,590
Vice President 1992 394,333 346,500 21,207 195,688 119,606 42,410
Kenneth R. Murray 1994 433,750 886,000 14,587 0 273,108 64,485
Executive 1993 425,000 841,531 22,908 408,750 0 46,538
Vice President 1992 402,083 350,625 13,623 195,688 27,198 43,925
Daniel A. Saklad 1994 415,000 857,500 11,153 0 246,861 62,040
Executive 1993 396,667 819,531 25,681 408,750 43,698 43,105
Vice President 1992 363,333 321,750 13,109 195,688 51,280 39,125
James R. Campbell 1994 363,750 753,000 19,034 0 200,000 53,085
Executive 1993 338,750 721,531 15,568 408,750 0 33,285
Vice President 1992 320,000 216,000 14,254 97,344 86,080 131,148
</TABLE>
- ---------------------
(1) The amounts shown for 1994 in column (d) represent that portion of the 1994
incentive compensation awards paid in cash to the named executive officers
pursuant to the Corporation's "Performance-Based Compensation Policy for
Covered Executive Officers" discussed above under the heading "Human
Resources Committee Report on Executive Compensation."
(2) The amounts shown in column (e) represent amounts reimbursed to the named
executive officers in the years 1992-1994 for the payment of taxes incurred
in connection with perquisites. The named executive officers also received
compensation in the form of certain perquisites and personal benefits in
the years 1992-1994, the aggregate amount of which did not exceed $50,000
in each such year for any named executive officer.
(3) The shares of restricted common stock held by each of the persons named in
the above table and the market value of such shares, based on the number of
shares held and a closing market price of the Corporation's common stock of
$23.375 per share as of December 30, 1994 (the last trading day prior to
December 31, 1994), were as follows: Richard M. Kovacevich, 29,760 shares,
$695,640; Leslie S. Biller, 39,840 shares, $931,260; Kenneth R. Murray,
39,840 shares, $931,260; Daniel A. Saklad, 39,840 shares, $931,260; James
R. Campbell, 20,000 shares, $467,500. Dividends are paid on shares of
restricted stock on the same dates and at the same rate as those paid to
all holders of the Corporation's common stock. All of the restricted stock
awards vest over a period of three years, commencing in the fourth year
after the date of the original award.
(4) The restricted stock awards made in 1993 and 1992 represent compensation
attributable to 1992 and 1991 performance.
(5) The dollar amount shown as a restricted stock award to Richard M.
Kovacevich in 1994 constitutes that portion of his 1994 incentive
compensation award payable in the form of restricted stock pursuant to the
policy described in footnote (1) above and represents 19,700 shares of the
Corporation's common stock valued as of December 30, 1994. As of February
28, 1995, the date such restricted stock award was made to Mr. Kovacevich,
the value of such shares was $507,275, based on a closing market price of
the Corporation's common stock of $25.75 per share on that date.
23
<PAGE>
(6) Except as noted below with regard to Richard M. Kovacevich, the amount
shown in column (i) for each named executive officer is the total of the
Corporation's contributions to the Corporation's Savings-Investment Plan
("SIP"), a 401(k) plan in which all employees are eligible to participate,
and contributions to the Corporation's Supplemental Savings-Investment
Plan, a non-qualified supplemental executive retirement plan ("Supplemental
SIP"). For the year ended December 31, 1994, the Corporation's contribution
to SIP for each of the named executive officers was $9,240 (the maximum
allowable contribution under SIP). The Corporation's contribution to
Supplemental SIP for the year ended December 31, 1994, for such persons was
as follows: Mr. Kovacevich, $111,300; Mr. Biller, $58,500; Mr. Murray,
$55,245; Mr. Saklad, $52,800; and Mr. Campbell, $43,845. The amount shown
for Mr. Kovacevich for 1993 also includes the fair market value of a stock
award to Mr. Kovacevich in 1993 relating to his 1992 compensation which
contains restrictions on transfer of ownership expiring over a period of
three years.
OPTION GRANTS AND EXERCISES
The following tables summarize for 1994 under the Corporation's 1985 Long-
Term Incentive Compensation Plan option grants to and option exercises by the
executive officers named in the Summary Compensation Table above, and the value
of the options held by such persons at December 31, 1994:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM (3)
- --------------------------------------------------------------------- ----------------------
(A) (B) (C) (D) (E) (F) (G)
PERCENT OF
TOTAL
OPTIONS/SARS EXERCISE
OPTIONS/SARS GRANTED TO OR BASE
GRANTED (#) EMPLOYEES IN PRICE EXPIRATION
NAME (1)(2) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ---- ------------ ------------ -------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Richard M. Kovacevich 530,000 6.4% $25.4375 7/26/2004 $8,478,679 $21,486,637
103,610(2) 1.2% 27.0625 7/23/2001 1,123,597 2,611,854
Leslie S. Biller 200,000 2.4% 25.4375 7/26/2004 3,199,501 8,108,165
45,756(2) 0.6% 26.0000 7/23/2001 482,073 1,122,601
Kenneth R. Murray 200,000 2.4% 25.4375 7/26/2004 3,199,501 8,108,165
73,108(2) 0.9% 22.3125 7/23/2001 622,420 1,435,861
Daniel A. Saklad 200,000 2.4% 25.4375 7/26/2004 3,199,501 8,108,165
46,861(2) 0.6% 24.5000 7/23/2001 449,565 1,041,249
James R. Campbell 200,000 2.4% 25.4375 7/26/2004 3,199,501 8,108,165
</TABLE>
- ---------------------
(1) Stock options have no value on the date of grant because the exercise price
per share is equal to the market price per share of the Corporation's
common stock on the date the option is granted. A stock option has value to
the optionee in the future only if the market price of the Corporation's
common stock at the time the option is exercised exceeds the exercise
price.
(2) The indicated option grants are "accelerated ownership" options ("AOs") and
are immediately exercisable. The general terms of AOs are described under
the heading "Report of the Human Resources Committee on Executive
Compensation." No SARs were granted in 1994.
(3) The dollar amounts under Columns (f) and (g) are the result of calculations
at the 5% and 10% rates set by the Securities and Exchange Commission (the
"Commission"). Based on these 5% and 10% assumed annual rates of
appreciation and a closing per share stock price of $23.375 for the
Corporation's common stock on December 30, 1994 (the last trading day prior
to December 31, 1994), the potential realizable value to the holders of all
issued and outstanding shares on that date (309,144,857 shares), if such
shares were held for an assumed 9.07 year period (a period equal to the
weighted average remaining terms of the options shown above), would be $4.0
billion (based on the 5% rate) and $9.9 billion (based
24
<PAGE>
on the 10% rate). The potential realizable value over the option terms of
the options included in the above table and the potential realizable values
to stockholders on an aggregate basis over the assumed holding period are
computed using the assumed rates set by the Commission and should not be
viewed as, and are not intended to be, a forecast of possible future
appreciation, if any, in the Corporation's stock price.
AGGREGATED OPTION/SAR EXERCISES IN
LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
VALUE OF
UNEXERCISED
NUMBER OF IN-THE-MONEY
UNEXERCISED OPTIONS/SARS
OPTIONS/SARS AT AT FISCAL
FISCAL YEAR END YEAR END (IN
SHARES (#) (IN SHARES) DOLLARS)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED($)(1) UNEXERCISABLE(2) UNEXERCISABLE
- ---- ------------ -------------- ---------------- -------------
<S> <C> <C> <C> <C>
Richard M. Kovacevich 138,000 $1,729,306 306,409/530,000 $0/$0
Leslie S. Biller 60,000 688,122 238,934/200,000 529,875/ 0
Kenneth R. Murray 90,000 700,302 282,924/200,000 1,533,731/ 0
Daniel A. Saklad 60,000 598,122 181,559/200,000 554,632/ 0
James R. Campbell 0 688,122 287,798/200,000 2,463,435/ 0
</TABLE>
- --------------------
(1) Once a stock option becomes exercisable, the timing of the option exercise
occurs at the discretion of the executive. If the value realized in column
(c) is divided by the number of years between the date the option was
granted and its exercise date, the annualized value realized by each of the
executive officers named above would have been as follows: Mr. Kovacevich,
$576,435; Mr. Biller, $229,374; Mr. Murray, $233,434; and Mr. Saklad,
$199,374.
(2) Column (d) lists the total options held (stated as shares exercisable and
unexercisable) for the named executive officers as of December 31, 1994. As
of that date, such executive officers also beneficially held an aggregate
of 1,668,852 shares of the Corporation's common stock. As a consequence,
executive officers share with all stockholders the risk of future changes
in the market value of the Corporation's common stock, which will depend
upon, among other factors, the Corporation's future performance and such
executive officer's contribution to that performance.
PENSION PLANS
The Corporation's Pension Plan (the "Pension Plan") is a defined benefit plan
covering all employees of the Corporation and participating subsidiaries who
have attained age 21 and have worked at least 1,000 hours during a period
specified in the plan. Employees do not contribute to the Pension Plan, and the
contributions by the Corporation and its subsidiaries are not allocated to the
accounts of the individual participants. Benefits under the Pension Plan are
determined on the basis of age, years of service and compensation. A
participant becomes vested upon completing 5 years of Vesting Service or having
attained the age of 65.
The monthly benefit at regular retirement age is a life annuity equal to 1.1%
of final average monthly earnings up to the Integration Level and 1.6% of final
average monthly earnings in excess of the Integration Level for each year of
credited service. No more than 35 years of credited service is recognized under
the Pension Plan. Under the provisions of the Pension Plan, the "Integration
Level" for any year is determined by the following formula: ($1,400 x Social
Security Wage Base for Current Year) divided by $48,000. Based on this formula,
the Integration Level (stated as an amount per month) is $1,785 for
participants retiring in 1995. For participants retiring in years after 1995
the Integration Level is indexed to increase at the same rate as the Social
Security wage base. The benefit formula described above may be further amended
effective January 1, 1989, to comply with regulations under the Tax Reform Act
of 1986.
25
<PAGE>
A participant's final average earnings is the highest average monthly
compensation paid during any 36 consecutive months within the last 120 months
of employment. Compensation for purposes of the plan is the participant's basic
compensation, including salary reduction amounts under Section 401(k) and
Section 125 of the Internal Revenue Code and payments made pursuant to
designated incentive compensation plans of the Corporation, whether or not
deferred under any deferral plan maintained by the Corporation.
For the individual executive officers named in the Summary Compensation
Table, the compensation recognized under the plan for 1994 is the amount shown
in the table for the year 1994 as "Salary" (column (c)) and as "Bonus" (column
(d)). As of December 31, 1994, credited service for such persons was as
follows: Mr. Kovacevich, 8 years, 10 months; Mr. Biller, 7 years, 4 months; Mr.
Murray, 12 years; Mr. Saklad, 7 years, 5 months; Mr. Campbell, 30 years, 6
months.
Effective January 1, 1994, compensation under the Pension Plan for purposes
of a plan year is limited by the Internal Revenue Code to $150,000. In
addition, the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), places certain limitations on the annual pension that can be paid
from a tax-qualified pension plan. The annual limit currently in effect is
$120,000, but depending on when a participant retires, the annual benefit may
exceed that amount. As permitted by ERISA, the Board of Directors has adopted a
Supplemental Pension Plan under which amounts otherwise payable under the
Pension Plan in excess of the Internal Revenue Code and ERISA limitations will
be paid by the Corporation as an operating expense.
The following table shows the estimated annual average retirement benefits
payable under the Pension Plan and the Supplemental Pension Plan for
individuals with various combinations of annualized final average compensation
and years of credited service, without regard to the limitations imposed by the
Internal Revenue Code and ERISA. The annual amounts shown below, as estimated
and when paid, are not subject to offset by the amount of Social Security
benefits.
<TABLE>
<CAPTION>
YEARS OF SERVICE AT RETIREMENT
ANNUALIZED FINAL -------------------------------------------------------------
AVERAGE COMPENSATION 10 15 20 25 30 35
- -------------------- -------- -------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 250,000 $ 38,929 $ 58,394 $ 77,858 $ 97,323 $ 116,787 $ 136,252
500,000 78,929 118,394 157,858 197,323 236,787 276,252
750,000 118,929 178,394 237,858 297,323 356,787 416,252
1,000,000 158,929 238,394 317,858 397,323 476,787 556,252
1,250,000 198,929 298,394 397,858 497,323 596,787 696,252
1,500,000 238,929 358,394 477,858 597,323 716,787 836,252
1,750,000 278,929 418,394 557,858 697,323 836,787 976,252
2,000,000 318,929 478,394 637,858 797,323 956,787 1,116,252
2,250,000 358,929 538,394 717,858 897,323 1,076,787 1,256,252
2,500,000 398,929 598,394 797,858 997,323 1,196,787 1,396,252
2,750,000 438,929 658,394 877,858 1,097,323 1,316,787 1,536,252
3,000,000 478,929 718,394 957,858 1,197,323 1,436,787 1,676,252
3,250,000 518,929 778,394 1,037,858 1,297,323 1,556,787 1,816,252
3,500,000 558,929 838,394 1,117,858 1,397,323 1,676,787 1,956,252
</TABLE>
Lloyd P. Johnson, Chairman of the Board and a nominee for re-election as a
director of the Corporation, has an agreement with the Corporation which
provides for payments to him of the difference, if any, between the amount he
will receive under the Corporation's Pension Plan and the amount he would have
been entitled to receive under any Pension Plan of the Corporation selected by
him in effect during the term of his employment. In addition, the agreement
provides for certain supplemental retirement benefits, the amount of which will
be determined by reference to the benefits Mr. Johnson actually receives from
his former employer. If Mr. Johnson had retired on December 31, 1994, and
received the maximum benefit available under this agreement, he would have been
entitled to an annual early retirement benefit from the Corporation of
approximately $290,000.
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LONG TERM DISABILITY PLANS
The executive officers named in the Summary Compensation Table are eligible
to participate in the Corporation's Long Term Disability Plan, which is
available to all employees of the Corporation. This plan covers compensation of
up to $500,000 in salary and payments made under incentive compensation plans
designated by the Chairman, the President, any Executive Vice President or any
Senior Vice President of the Corporation. The plan provides a monthly benefit
to an employee scheduled to work 20 or more hours per week who has elected to
participate in the plan and who becomes totally disabled for more than 22
weeks. The monthly benefit equals 65% of the participant's average basic
monthly compensation, up to a maximum monthly benefit (based on a maximum
annual compensation of $500,000) of $27,083. The Corporation's Supplemental
Long Term Disability Plan extends similar disability coverage for the base
salaries earned by Richard M. Kovacevich and Lloyd P. Johnson in excess of
$500,000. The monthly benefit payable under either plan may be subject to
offset for other sources of income.
SEVERANCE AGREEMENTS
The Corporation has entered into severance agreements with certain executive
officers of the Corporation, including the five executive officers named in the
Summary Compensation Table above. The purpose of these agreements is to
encourage the officers to continue to carry out their duties in the event of a
possible change of control of the Corporation. Under the terms of these
agreements, the officers may become entitled to receive certain payments upon
their termination of employment or if their job duties or compensation and
benefits are substantially reduced within three years following a change of
control of the Corporation. The maximum amount of payments is two times the sum
of: (i) the officer's base salary rate, (ii) the value of perquisites provided
by the Corporation, and (iii) the officer's highest potential incentive
compensation award or, in the case of Mr. Kovacevich, an amount equal to the
two-year average of his incentive compensation awards. In addition, the
agreements provide for the continuation of certain medical, dental and life
insurance benefits for up to two years after termination. If payments received
by any such officer as a result of a change of control result in an excise tax
liability for such officer, the Corporation will also pay to the officer an
additional amount equal to the excise tax plus a gross-up for additional income
taxes, interest and penalties related to the excise tax. If a change of control
and termination of employment had occurred on February 28, 1995, giving rise to
payments under these severance agreements, the approximate amounts payable to
the executive officers named in the Summary Compensation Table would be as
follows: Mr. Kovacevich, $5,450,700; Mr. Biller, $2,950,000; Mr. Murray,
$2,887,600; Mr. Saklad, $2,764,150, and Mr. Campbell, $2,431,400.
The Corporation has a plan that provides severance pay to employees who are
discharged from employment under certain circumstances. The amount of severance
pay is based on years of service, job level, and the severance option selected
by the employee. If Mr. Kovacevich had been discharged on January 1, 1995, the
maximum amount payable under this policy would have been his base salary for a
period of 18 months, plus life and health insurance benefits for 22 months.
With respect to the other individuals named in the Summary Compensation Table
herein, the maximum amount payable under this policy would have been their base
salary plus benefits for the following periods: Mr. Biller, 16 months; Mr.
Murray, 18 months; Mr. Saklad, 16 months; Mr. Campbell, 18 months. In addition,
Mr. Kovacevich will be entitled to receive benefits consisting of a minimum
payment of 12 months' salary (less the amount of any other severance payments
to which he may be entitled under any severance plan of the Corporation then in
effect) and a prorata portion of his incentive compensation, together with
certain life and health insurance benefits, if his employment is terminated by
the Corporation for a reason other than cause or if his job duties are
substantially reduced and he resigns within 90 days thereafter.
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OTHER INFORMATION RELATING TO DIRECTORS, NOMINEES,
EXECUTIVE OFFICERS AND ASSOCIATES
LOAN TRANSACTIONS
During the past year certain directors (in addition to those directors
discussed below under the heading "Compensation Committee Interlocks and
Insider Participation") and executive officers of the Corporation and/or one or
more of their associates had banking transactions in the ordinary course of
business with one or more of the bank subsidiaries of the Corporation. Such
transactions included loans made in the ordinary course of business. All such
loans were made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other persons and did not involve more than the normal risk of collectibility
or present other unfavorable features.
Certain executive officers of the Corporation, including an executive officer
who is also a director, and those directors discussed below under the heading
"Compensation Committee Interlocks and Insider Participation," have also
obtained mortgage loans from Norwest Mortgage, Inc. ("NMI"), a subsidiary of
the Corporation. In connection with each of these loans and in accordance with
its policy applicable to all employees and the Corporation's directors, NMI
waived an origination fee equal to one percent of the loan amount for each such
executive officer and director. Three of the executive officers named in the
Summary Compensation Table were indebted to NMI or a subsidiary thereof in
1994. Information for each such named executive officer, including the highest
balance on each loan outstanding since January 1, 1994, the balance outstanding
on each loan on December 31, 1994, and the annual interest rate thereon, is as
follows: Leslie S. Biller, highest balances on two loans--$496,734 and
$202,714, balances outstanding on December 31, 1994--$491,535 and $199,293,
interest rates per annum (adjustable)--7.125% and 6.125%; Daniel A. Saklad,
highest loan balance--$431,200, balance outstanding on December 31, 1994--
$430,304, interest rate per annum (adjustable)--7.875%; James R. Campbell,
highest loan balance--$375,000, balance outstanding on December 31, 1994--
$369,341, interest rate per annum (adjustable)--6.875%. Lloyd P. Johnson, a
director and executive officer of the Corporation, also obtained two mortgage
loans from NMI in 1994 at annual interest rates of 7.375% and 6.625%,
respectively. The highest loan balances outstanding on such loans since January
1, 1994 were $276,500 and $147,000. As of December 31, 1994, one such loan
remained outstanding with a balance of $250,243, and the other had been repaid
in full. In addition, two other executive officers of the Corporation were
indebted to NMI in the aggregate amount of $602,300, representing mortgage
loans with interest rates ranging from 7.75% to 8.50% per annum. As of February
28, 1995, of the mortgage loans indicated above, two have been sold by NMI in
the secondary real estate mortgage market and four were transferred by NMI to
subsidiaries.
In addition, Gerald J. Ford, a director of the Corporation and nominee for
re-election, had a personal loan outstanding from Ford Bank Group, Inc., an
indirectly wholly-owned subsidiary of the Corporation. The highest balance
outstanding on this loan since January 1, 1994 was $1,255,930. The loan bore
interest at a floating rate equal to the prime rate from time to time of First
National Bank of West Texas, (now Norwest Bank Texas, N.A.), a bank subsidiary
of Ford Bank Group, Inc. The annual interest rate charged on this loan during
1994 was 6.00%. Mr. Ford repaid this loan in full in 1994. One other executive
officer of the Corporation also had a personal loan outstanding from Norwest
Capital Markets, Inc. ("NCM"), a subsidiary of the Corporation. As of December
31, 1994, the outstanding balance of the loan was $200,000, which amount was
also the highest outstanding loan balance since January 1, 1994. The loan bears
interest at a floating rate equal to one percent (1%) in excess of the base
lending rate from time to time of Norwest Bank Minnesota, N.A. The annual
interest rate charged on this loan during 1994 was 9.5%. The loan is secured by
a security interest to NCM in all shares of the Corporation's common stock
obtained by the executive officer from the exercise of stock options up to a
total value equal to 120% of the outstanding balance of the loan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Human Resources Committee (the "Committee") determines annually the
compensation to be paid to the Corporation's chief executive officer and other
executive officers, including the executive officers named
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in the Summary Compensation Table. The members of the Committee are Pierson M.
Grieve (Chair), Charles M. Harper, Richard D. McCormick, John E. Pearson, and
Michael W. Wright. During 1994, Richard D. McCormick and Michael W. Wright had
banking transactions in the ordinary course of business with one or more of the
bank subsidiaries of the Corporation. Such transactions involved loans made in
the ordinary course of business. All such loans were made on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with other persons and did not involve more
than the normal risk of collectibility or present other unfavorable features.
In addition, Pierson M. Grieve and Michael W. Wright also each obtained
mortgage loans from, and Richard D. McCormick had a mortgage loan outstanding
with, NMI or a subsidiary thereof in 1994. Pursuant to NMI's policy described
above under the heading "Loan Transactions," NMI waived the one percent
origination fee for each such mortgage loan. Information for each such
director, including the highest balance on each loan outstanding since January
1, 1994, the balance outstanding on each loan on December 31, 1994, and the
annual interest rate thereon, is as follows: Pierson M. Grieve, highest loan
balance--$424,000, balance outstanding on December 31, 1994--$420,601, interest
rate per annum (adjustable)--7.25%; Richard D. McCormick, highest loan
balance--$717,886; balance outstanding on December 31, 1994--$717,577, interest
rate per annum (adjustable)--6.75%; Michael W. Wright, highest loan balance--
$288,000, balance outstanding on December 31, 1994--$284,228, interest rate per
annum (adjustable)--6.625%. As of February 28, 1994, of the mortgage loans
indicated above, the loan to Mr. Wright has been sold by NMI in the secondary
real estate mortgage market.
CERTAIN TRANSACTIONS WITH RESPECT TO DIRECTORS
Gerald J. Ford. In January, 1994, the Corporation acquired First United Bank
Group, Inc. ("First United") pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), by the merger of First United into GST Co. ("GST"), a
wholly-owned subsidiary of the Corporation, in exchange for shares of the
Corporation's common stock (the "Merger"). Gerald J. Ford, who is a nominee for
re-election as a director of the Corporation, served as Chairman, Chief
Executive Officer, and a director of First United until the Merger. Certain
information about Mr. Ford, as well as information regarding certain
transactions entered into between the Corporation and him or a company of which
he is a stockholder, a director and an executive officer, in connection with
the Merger, is set forth below. See also pages 4 and 12 of this proxy statement
for additional information about Mr. Ford.
Under the terms of the Merger Agreement and as a condition to First United's
completion of the Merger, the Corporation agreed to expand its Board of
Directors by one member upon consummation of the Merger and to appoint Mr. Ford
as a director to fill the vacancy created by the increase. Mr. Ford was
appointed a director of the Corporation as of January 14, 1994, the effective
date of the Merger, and was elected as a director by the stockholders of the
Corporation at the 1994 annual meeting. In addition, the Corporation has agreed
pursuant to the Merger Agreement to publicly support and nominate Mr. Ford for
election to the Corporation's Board of Directors at any meeting of its
stockholders called for the purpose of electing directors and held prior to
January 14, 1997.
Mr. Ford also serves as Chairman of the Board, Chief Executive Officer, and a
director of First Nationwide Bank, a Federal Savings Bank, , in Dallas, Texas,
and is a principal shareholder of, the Chairman and a director of its parent
bank holding company, under a waiver of the Depository Institutions Management
Interlocks Act granted by the Federal Home Loan Bank Board ("FHLBB"), as
operating head of the Federal Savings and Loan Insurance Corporation ("FSLIC").
Mr. Ford has obtained confirmation from the Office of Thrift Supervision, as
successor to FSLIC, that the waiver continues to allow Mr. Ford to serve as a
director of the Corporation and of First Nationwide.
After the execution of the Merger Agreement with First United and prior to
the completion of the Merger, the Corporation guaranteed repayment of a $20
million line of credit from a third-party bank. The purpose of this line of
credit was to provide financing to complete two pending bank acquisitions in
Texas by an indirect bank holding company subsidiary of First United and to
enable First United to repurchase its outstanding Series B Floating Rate
Cumulative Preferred Stock (the "Series B Preferred Stock") and a related stock
warrant (the "Series B Warrant") as required by the Merger Agreement. Fifteen
million dollars was
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advanced in October 1993 on this line of credit to complete the pending bank
acquisitions in Texas. The remaining $5 million balance of the line of credit
was advanced in January 1994 prior to the Merger to First United to finance a
portion of the repurchase price for the Series B Preferred Stock and Series B
Warrant. The line of credit was repaid in full and the Corporation's guaranty
was discharged in February 1994.
Prior to the Merger, First United and Madison Financial, Inc. ("Madison
Financial") each owned a 50% undivided interest in a 1985 IAI Westwind I jet
airplane. Mr. Ford is the Chairman, Chief Executive Officer, a director and a
stockholder of Madison Financial. In connection with consummation of the Merger
in January, 1994 and as a condition thereto, First United sold its interest in
the airplane to Madison Financial for its appraised value of $850,000. First
United was also released upon the sale from its obligations under a security
agreement with the third-party bank that provided financing for the original
purchase of the airplane.
Also in connection with the Merger, the Corporation sold and Mr. Ford
purchased certain artwork owned by First United for its appraised value of
approximately $105,000.
Richard S. Levitt. Norwest Financial Maryland, Inc. ("NFM"), a wholly-owned
subsidiary of Norwest Financial, Inc. ("NFI"), and an indirect wholly-owned
subsidiary of the Corporation, leases office space under a lease having a term
of five years from MB Limited Partnership ("MB"), and also recently entered
into a lease for additional office space for a term of five years with AF
Limited Partnership ("AF"). The general partner of both MB and AF is Nellis
Corporation ("Nellis"). Richard S. Levitt, a nominee for re-election as a
director, is the Chairman and Chief Executive Officer of Nellis. One hundred
percent of the outstanding voting stock of Nellis is owned by Mr. Levitt's two
sons, both of whom are also officers of Nellis. In addition, the sole limited
partners of MB and AF are trusts, the beneficiaries of which are descendents of
Mr. Levitt.
NFM's lease with MB provides for a total fixed rent over the lease term of
$129,412, plus estimated operating expenses of approximately $5,900 annually.
NFM's proposed lease with AF provides for a total fixed rent over the lease
term of $125,370, plus estimated operating expenses of approximately $3,800
annually. Both leases are guaranteed by NFI. In the opinion of the management
of NFM and NFI and the management of the Corporation, the terms of the lease
and the proposed lease are fair and reasonable with respect to NFM and NFI.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors, certain officers, and any persons holding more than
10% of the Corporation's common stock to report their initial ownership of the
Corporation's common stock and any subsequent changes in that ownership to the
Securities and Exchange Commission and the New York Stock Exchange. Specific
due dates for these reports have been established, and the Corporation is
required to disclose in this proxy statement any failure to file by these dates
during 1994. All of these filing requirements were satisfied, except that
Richard M. Kovacevich, an executive officer and a director of the Corporation,
filed late reports relating to the purchase of an aggregate of 2,495 shares of
common stock by the sole corporate trustee of a trust of which Mr. Kovacevich
is a beneficiary. The corporate trustee used dividends paid on shares of the
Corporation's common stock held by the trust to purchase these additional
shares. In making these disclosures, the Corporation has relied on written
representations of its directors and officers and copies of the reports that
they have filed with the Commission.
30
<PAGE>
ITEM 2. PROPOSAL TO APPROVE AN AMENDMENT
TO THE RESTATED CERTIFICATE OF INCORPORATION
TO AUTHORIZE PREFERENCE STOCK
PROPOSED AMENDMENT
The Corporation's Restated Certificate of Incorporation, as amended, (the
"Restated Certificate") currently authorizes the issuance of a total of
505,000,000 shares of capital stock, consisting of 5,000,000 shares of
preferred stock without par value and 500,000,000 shares of common stock with a
par value of $1 2/3 per share. As of March 7, 1995, the Corporation currently
had 311,274,079 shares of common stock outstanding, and 3,265,065 shares of
preferred stock outstanding, divided into four series. Of the four outstanding
series of preferred stock, three series were issued for general corporate
financing purposes and the remaining series was issued to fund the
Corporation's Savings Investment Plan.
The Corporation's Board of Directors recommends that the Corporation's
stockholders approve an amendment (the "Amendment") to the Corporation's
Restated Certificate that would authorize a new class of capital stock
consisting of a total of 4,000,000 shares to be denominated "Preference Stock,"
which may be issued upon the authority of the Board of Directors, and which
would have the powers, preferences, rights, qualifications, limitations, and
restrictions as are permitted by the Amendment, and as the Board of Directors
may from time to time fix by one or more resolutions, provided that each share
of Preference Stock shall not be entitled to more than one vote per share.
If the Amendment is adopted, the total number of shares of stock the
Corporation would be authorized to issue would be increased to 509,000,000,
consisting of 500,000,000 shares of common stock, 5,000,000 shares of preferred
stock, and 4,000,000 shares of Preference Stock.
Set forth below is a summary of the terms of the proposed Amendment, which
summary is qualified in its entirety by the text of the Amendment attached to
this proxy statement as Exhibit A.
REASONS FOR AMENDMENT
Under the proposed Amendment, the Board would be authorized to issue, at any
time or from time to time, one or more series of Preference Stock. In addition,
the Board of Directors would have the authority to determine the designations,
and the relative rights and preferences of such stock, including, but not
limited to, dividend rights, redemption prices and conditions, sinking fund
provisions, liquidation preferences, conversion features, priority, and
transfer restrictions, if any; voting rights, if any (provided that the holders
of shares of Preference Stock would not be entitled to more than one vote per
share); and any other preferences, powers, qualifications, special or relative
rights and privileges and limitations or restrictions of such preferences or
rights. Holders of shares of the capital stock of the Corporation would have no
preemptive rights to participate in any issuance of Preference Stock.
The Board of Directors believes that approval of the Amendment to authorize
the Preference Stock will provide flexibility for future financings by the
Corporation. The proposed shares of Preference Stock could be issued in one or
more public or private transactions for any proper corporate purpose, including
the acquisition of other businesses, the raising of additional capital for use
in the Corporation's business, stock splits, the payment of stock dividends or
other distributions in shares of stock, or in connection with employee stock
plans. While the Corporation currently has no arrangements, understandings or
commitments with respect to the issuance of any of the additional shares, it is
considered advisable to have the authorization to issue such additional shares
in order to enable the Corporation, as the need may arise, to move promptly to
take advantage of market conditions and the availability of other favorable
opportunities. If the Amendment is approved, the Board will be able to specify
the precise characteristics of the Preference Stock to be issued, depending on
current market conditions and the nature of specific transactions. However,
under existing New York Stock Exchange regulations, approval of the holders of
a majority of the common stock would nevertheless be required in connection
with a proposed issuance (other than in a public offering for cash) of a
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<PAGE>
series of Preference Stock convertible into or exchangeable for common stock
(i) if the number of shares of common stock to be issued upon conversion or
exchange of such series of Preference Stock will have voting power equal to or
in excess of 20% of the voting power outstanding before such conversion or
exchange; (ii) if the number of shares of common stock to be issued upon
conversion or exchange of such series of Preference Stock is or will be equal
to or in excess of 20% of the number of shares of common stock outstanding
prior to such conversion or exchange; or (iii) if the issuance would result in
a change in control of the Corporation.
Even though the voting rights of the Preference Stock are limited as
described above, under certain circumstances the issuance of shares of
Preference Stock could be used to make any attempt to gain control of the
Corporation or the Board of Directors more difficult or time-consuming. The
Corporation currently has in effect a plan pursuant to which common
stockholders receive as a dividend the right to purchase one four-hundredth of
a share of the Corporation's authorized Series A Junior Participating Preferred
Stock in the event of certain acquisitions or tender offers. The Board does not
intend to issue shares of the Preference Stock for an anti-takeover purpose
including, without limitation, to implement any other stockholders' rights plan
or with features intended to make an attempted acquisition of the Corporation
more difficult or costly or to any individual or group for the purpose of
creating a block of voting power to support management on a controversial
issue.
ACTION BY STOCKHOLDERS
The Board of Directors believes that, as proposed, the authorization of
4,000,000 shares of Preference Stock is in the best interests of the
stockholders and the Corporation. Approval of this proposal requires a vote in
favor of the Amendment by the holders of a majority of the Corporation's
outstanding shares of common stock.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE
FOR THE APPROVAL OF THE AMENDMENT TO THE RESTATED CERTIFICATE TO AUTHORIZE
PREFERENCE STOCK
ITEM 3. APPOINTMENT OF AUDITORS
At the meeting a vote will be taken on the proposal to ratify the appointment
by the Board of Directors of KPMG Peat Marwick LLP, independent certified
public accountants, as auditors of the Corporation and its subsidiaries for the
year ending December 31, 1995. KPMG Peat Marwick LLP or its predecessors have
examined the accounts of the Corporation annually since 1931.
Representatives of KPMG Peat Marwick LLP are expected to be present at the
annual meeting of stockholders on April 25, 1995, with the opportunity to make
a statement if they desire to do so, and such representatives are expected to
be available to respond to appropriate questions.
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the annual meeting of
stockholders to be held in 1996 must be received by the Secretary of the
Corporation, at Norwest Center, Sixth and Marquette, Minneapolis, Minnesota
55479-1026, no later than November 22, 1995.
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ANNUAL REPORTS
The Annual Report of the Corporation for the year 1994, including financial
statements, has been sent to stockholders. THE CORPORATION WILL PROVIDE WITHOUT
CHARGE TO EACH STOCKHOLDER, ON WRITTEN REQUEST, A COPY OF THE CORPORATION'S
ANNUAL REPORT ON FORM 10-K FOR THE YEAR 1994, INCLUDING THE FINANCIAL
STATEMENTS AND SCHEDULES THERETO, FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION. If a stockholder requests copies of any exhibits to such Form 10-K,
the Corporation will require the payment of a fee covering its reasonable
expenses. A written request should be addressed to the Secretary, Norwest
Corporation, Norwest Center, Sixth and Marquette, Minneapolis, Minnesota 55479-
1026.
By Order of the Board of Directors,
[SIGNATURE OF LAUREL A. HOLSCHUH]
LAUREL A. HOLSCHUH
Secretary
March 21, 1995
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EXHIBIT A
PROPOSED AMENDMENT TO RESTATED
CERTIFICATE OF INCORPORATION TO
AUTHORIZE A CLASS OF PREFERENCE STOCK
RESOLVED that the paragraphs of ARTICLE FOURTH of the Restated Certificate of
Incorporation, as amended, of Norwest Corporation through and including Section
8 thereof are hereby amended and restated in their entirety to read as follows:
FOURTH: The total number of shares of all classes of stock which the
corporation shall have authority to issue is Five Hundred Nine Million
(509,000,000) shares, consisting of Five Million (5,000,000) shares of
Preferred Stock without par value, Four Million (4,000,000) shares of
Preference Stock without par value and Five Hundred Million (500,000,000)
shares of Common Stock of the par value of $1 2/3 per share.
The designations and the voting powers, preferences and relative,
participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, of the Preferred Stock, the Preference
Stock and the Common Stock which are fixed by the Certificate of
Incorporation and the express grant of authority to the Board of Directors
of the corporation (hereinafter referred to as the "Board of Directors") to
fix by resolution or resolutions the designations and the voting powers,
preferences and relative, participating, optional or other special rights,
and qualifications, limitations or restrictions thereof, of the Preferred
Stock and the Preference Stock which are not fixed by the Certificate of
Incorporation are as follows:
1. The Preferred Stock may be issued at any time or from time to time
in any amount, provided not more than 5,000,000 shares thereof shall be
outstanding at any one time, as Preferred Stock of one or more series,
as hereinafter provided. Each share of any one series of Preferred
Stock shall be identical in all respects except as to the date from
which dividends thereon may be cumulative, each series of Preferred
Stock shall be distinctly designated by letter or descriptive words,
and all series of Preferred Stock shall rank equally and be identical
in all respects except as permitted by the provisions of Section 2 of
this Article FOURTH. Shares of Preferred Stock shall be issued only as
fully paid and non-assessable shares.
The Preference Stock may be issued at any time or from time to time
in any amount, provided not more than 4,000,000 shares thereof shall be
outstanding at any one time, as Preference Stock of one or more series,
as hereinafter provided. Each share of any one series of Preference
Stock shall be identical in all respects except as to the date from
which dividends thereon may be cumulative, each series of Preference
Stock shall be distinctly designated by letter or descriptive words,
and all series of Preference Stock shall rank equally and be identical
in all respects except as permitted by the provisions of Section 2 of
this Article FOURTH. Shares of Preference Stock shall be issued only as
fully paid and non-assessable shares.
2. Authority is hereby expressly granted to and vested in the Board of
Directors at any time or from time to time to issue the Preferred Stock as
Preferred Stock of any series and the Preference Stock as Preference Stock
of any series and, in connection with the creation of each such series, to
fix by resolution or resolutions providing for the issue of shares thereof
the designations and the voting powers, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, of such series so far as not
inconsistent with the provisions of this Article FOURTH applicable to all
series of Preferred Stock or Preference Stock, respectively, and to the
full extent now or hereafter permitted by the laws of the State of
Delaware, including the following:
(a) The distinctive designation of such series and the number of
shares which shall constitute such series, which number may be
increased (except where otherwise provided by the Board of Directors in
creating such series) or decreased (but not below the number of shares
thereof then outstanding) from time to time by like action of the Board
of Directors;
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(b) The annual rate or rates of dividends payable on shares of such
series, whether dividends shall be cumulative and, if so, the date or
dates from which dividends shall be cumulative on the shares of such
series, the preferences, restrictions, limitations and conditions upon
the payment of dividends, and the dates on which dividends, if
declared, shall be payable;
(c) Whether shares of such series shall be redeemable and, if so, the
terms and conditions of such redemption, including the date or dates
upon or after which they shall be redeemable, and the amount per share
payable in case of redemption, which amount may vary under different
conditions and at different redemption dates;
(d) The rights of the shares of such series in the event of voluntary
or involuntary liquidation, dissolution or winding up of the
corporation, and the relative rights of priority, if any, of payment of
shares of such series;
(e) Whether shares of such series shall have a purchase, retirement
or sinking fund for the purchase, retirement, or redemption of shares
of such series and, if so, the terms and provisions thereof;
(f) Whether shares of such series shall have conversion privileges
and, if so, the terms and provisions thereof, including provision for
adjustment of the conversion rate in such events as the Board of
Directors shall determine;
(g) Whether shares of such series shall have voting rights, in
addition to voting rights provided by law, and, if so, the terms and
provisions thereof; and
(h) Any other preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions
thereof.
3. The holders of the Preferred Stock of each series and the holders of
the Preference Stock of each series, respectively, shall be entitled to
receive such dividends, when and as declared by the Board of Directors, out
of funds legally available therefor, as they may be entitled to in
accordance with the resolution or resolutions adopted by the Board of
Directors providing for the issue of such series, payable on such dates as
may be fixed in such resolution or resolutions. So long as there shall be
outstanding any shares of Preferred Stock of any series or any shares of
Preference Stock of any series entitled to cumulative dividends pursuant to
the resolution or resolutions providing for the issue of such series, no
dividend, whether in cash or property, shall be paid or declared, nor shall
any distribution be made, on the Common Stock, nor shall any shares of
Common Stock be purchased, redeemed or otherwise acquired for value by the
corporation, if at the time of making such payment, declaration,
distribution, purchase, redemption or acquisition the corporation shall be
in default with respect to any dividend payable on, or obligation to
maintain a purchase, retirement or sinking fund with respect to or to
redeem, shares of Preferred Stock of any series or shares of Preference
Stock of any series. The foregoing provisions of this Section 3 shall not,
however, apply to a dividend payable in Common Stock or to the acquisition
of shares of Common Stock in exchange for, or through application of the
proceeds of the sale of, shares of Common Stock.
Subject to the foregoing and to any further limitations prescribed in
accordance with the provisions of Section 2 of this Article FOURTH, the
Board of Directors may declare, out of any funds legally available
therefor, dividends upon the then outstanding shares of Common Stock, and
shares of Preferred Stock of any series and shares of Preference Stock of
any series shall not be entitled to participate therein.
4. In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the corporation, the holders of the Preferred Stock of
each series and the holders of the Preference Stock of each series shall be
entitled to receive, out of the assets of the corporation available for
distribution to its stockholders, before any distribution of assets shall
be made to the holders of the Common Stock, the amount per share fixed by
the Board of Directors pursuant to Section 2 of this Article FOURTH, plus
in each such case an amount equal to any cumulative dividends thereon to
the date of final distribution to the holders of the Preferred Stock or to
the holders of the Preference Stock, respectively; and the holders of the
Common Stock shall be entitled, to the exclusion of the holders of the
Preferred Stock of
A-2
<PAGE>
any and all series and the holders of the Preference Stock of any and all
series, respectively, to participate ratably in all the assets of the
corporation then remaining in accordance with their respective rights and
preferences. If upon any liquidation, dissolution or winding up of the
corporation the assets available for distribution shall be insufficient to
pay the holders of all outstanding shares of Preferred Stock or the holders
of all outstanding shares of Preference Stock the full amounts to which
they respectively shall be entitled, the holders of shares of Preferred
Stock of all series and the holders of shares of Preference Stock of all
series, respectively, shall participate ratably in any distribution of
assets according to the respective amounts which would be payable in
respect of the shares of Preferred Stock or shares of Preference Stock held
by them upon such distribution if all amounts payable in respect of the
Preferred Stock of all series or the Preference Stock of all series,
respectively, were paid in full. Neither the statutory merger nor
consolidation of the corporation into or with any other corporation, nor
the statutory merger or consolidation of any other corporation into or with
the corporation, nor a sale, transfer or lease of all or any part of the
assets of the corporation, shall be deemed to be a liquidation, dissolution
or winding up of the corporation within the meaning of this Section 4.
5. The corporation, at the option of the Board of Directors, may redeem
the whole or any part of the Preferred Stock of any series or of the
Preference Stock of any series at the price or prices and on the terms and
conditions provided in the resolution or resolutions adopted by the Board
of Directors providing for the issue of such series.
6. Anything herein or in any resolution or resolutions adopted by the
Board of Directors providing for the issue of any series of Preferred Stock
or any series of Preference Stock contained to the contrary
notwithstanding, the rights of the holders of all classes of stock of the
corporation in respect of dividends and purchase, retirement or sinking
funds, if any, shall at all times be subject to the power of the Board of
Directors from time to time to set aside such reserves and to make such
other provisions, if any, as the Board of Directors shall deem to be
necessary or advisable for working capital, for expansion of the
corporation's business (including the acquisition of real and personal
property for that purpose) and for any other purpose of the corporation.
7. Except as otherwise provided by the statutes of the State of Delaware
or by the Certificate of Incorporation or by the resolution or resolutions
adopted by the Board of Directors providing for the issue of any series of
Preferred Stock or any series of Preference Stock, the holders of the
Preferred Stock and the holders of the Preference Stock shall have no right
to vote. The holders of the Preferred Stock and the holders of the
Preference Stock shall not be entitled to receive notice of any meeting of
stockholders at which they are not entitled to vote or consent. The holders
of shares of Preference Stock shall not be entitled to more than one vote
per share.
8. Except as otherwise provided by the statutes of the State of Delaware
or by the Certificate of Incorporation or by the resolution or resolutions
adopted by the Board of Directors providing for the issue of any series of
Preferred Stock or any series of Preference Stock, the vote of the holders
of all or any portion of any class of stock, as a class, shall not be
required for any action whatsoever to be taken or authorized by the
stockholders of the corporation, including any amendment of the Certificate
of Incorporation.
A-3
<PAGE>
LOGO
NC54228MSC95
<PAGE>
[Front of Card]
NORWEST CORPORATION PROXY
- -------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON TUESDAY, APRIL 25, 1995.
The shares of common stock of Norwest Corporation which you are entitled to vote
on March 7, 1995, will be voted as you specify on this card.
IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED "FOR" ITEMS 1 THROUGH 3.
By signing this proxy, you revoke all prior proxies and appoint Leslie S.
Biller, James R. Campbell, Kenneth R. Murray and Daniel A. Saklad, and each of
them, with full power of substitution, to vote your shares as specified on this
card and on any other business which may properly come before the Annual Meeting
or any adjournment thereof.
ITEM 1. ELECTION OF DIRECTORS. Nominees: David A. Christensen, Gerald J. Ford,
Pierson M. Grieve, Charles M. Harper, William A. Hodder, Lloyd P.
Johnson, Reatha Clark King, Richard M. Kovacevich, Richard S. Levitt,
Richard D. McCormick, Cynthia H. Milligan, Ian M. Rolland, Stephen E.
Watson and Michael W. Wright.
[_] FOR [_] WITHHOLD FOR ALL
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
the nominee's name on the line below.)
- -------------------------------------------------------------------------------
(Continued, and to be signed and dated, on the reverse side)
[Back of card]
ITEM 2. APPROVAL OF AMENDMENT TO RESTATED CERTIFICATE OF
INCORPORATION to authorize a new class of capital stock
consisting of 4,000,000 shares of Preference Stock.
[_] FOR [_] AGAINST [_] ABSTAIN
ITEM 3. RATIFICATION OF APPOINTMENT OF KPMG PEAT MARWICK LLP
as auditors.
[_] FOR [_] AGAINST [_] ABSTAIN
Dated_____________________________, 1995
________________________________________
Signature
________________________________________
Signature
Please sign exactly as your name appears above. In the case of joint owners,
each should sign. If signing as executor, trustee, guardian, or in any other
representative capacity or as an officer of a corporation, please indicate your
full title as such.
<PAGE>
[Front of Card]
NORWEST CORPORATION SAVINGS-INVESTMENT PLAN
CONFIDENTIAL VOTING INSTRUCTIONS TO
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, TRUSTEE
I hereby direct that the voting rights pertaining to the stock of Norwest
Corporation held by the Trust and allocable to my account under the above Plan,
as of December 31, 1994, shall be exercised at the Annual Meeting of
Stockholders of said Corporation to be held April 25, 1995, and at any
adjournment thereof, as specified on this instruction card and also on any other
business as may properly come before said meeting or any adjournment thereof.
This instruction card must be returned to Norwest Bank Minnesota, National
Association, Trustee, by April 21, 1995, if your instructions are to be honored.
The Trustee will tabulate the instructions from all Participants received by the
deadline and will determine the ratio of votes for and against each item. The
Trustee will then vote all shares held in the Trust according to the ratios so
determined.
IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED "FOR" ITEMS 1 THROUGH 3.
ITEM 1. ELECTION OF DIRECTORS. Nominees: David A. Christensen, Gerald J. Ford,
Pierson M. Grieve, Charles M. Harper, William A. Hodder, Lloyd P.
Johnson, Reatha Clark King, Richard M. Kovacevich, Richard S. Levitt,
Richard D. McCormick, Cynthia H. Milligan, Ian M. Rolland, Stephen E.
Watson and Michael W. Wright.
[_] FOR [_] WITHHOLD FOR ALL
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
the nominee's name on the line below.)
- -------------------------------------------------------------------------------
(Continued, and to be signed and dated, on the reverse side)
[Back of Card]
ITEM 2. APPROVAL OF AMENDMENT TO RESTATED CERTIFICATE OF
INCORPORATION to authorize a new class of capital stock
consisting of 4,000,000 shares of Preference Stock.
[_] FOR [_] AGAINST [_] ABSTAIN
ITEM 3. RATIFICATION OF APPOINTMENT OF KPMG PEAT MARWICK LLP
as auditors.
[_] FOR [_] AGAINST [_] ABSTAIN
Dated_____________________________, 1995
________________________________________
Signature
PLEASE DATE, SIGN AND MAIL this
instruction card promptly using the
enclosed envelope.
